The purpose of the stabilization fund is to reduce the fluctuations in general fund revenue caused by the economic cycle. These fluctuations result in large budget surpluses in some years and large deficits in other years. Without considering the structural deficit, the budget stabilization fund almost certainly will not have the funding necessary to offset the cyclical reduction in revenue that will occur during the next recession.

Because of the urgency of workforce issues and the desire to begin a statewide discussion about workforce goals and choices, the Governor’s Council on Workforce Policy wanted to understand if, and how, program governance and organization are hampering progress and what changes might be beneficial. The council asked Morrison Institute for Public Policy (School of Public Affairs, College of Public Programs, Arizona State University) to: (1) Explore the strengths and weaknesses of the organization of Arizona’s workforce system, particularly at the state level (2) Review how other states have revamped their systems and connected workforce and economic development (3) Recommend options for improving Arizona’s system During the second half of 2003, Morrison Institute for Public Policy talked with more than 60 workforce professionals, business people, and workforce board members across Arizona either individually or in small groups, researched other states’ approaches through interviews with officials in other states and national organizations, analyzed responses to an online survey of selected local workforce investment board members, and reviewed a wide variety of materials on economic, workforce, and community development. This report is the first of many steps for Arizona to reflect and act on workforce development governance and its system, because as Thurgood Marshall said, "You can’t stand still. You must move, and if you don’t move, they will run over you."

The purpose of this brief report is to provide information about Arizona’s system of workforce development, the Workforce Investment Act of 1998 (WIA), how the Act has been implemented in the greater Phoenix area and the program’s relevance to business. It is an update of a previous brief on the subject from February 2000. Prepared by Morrison Institute for Public Policy at the request of Greater Phoenix Leadership, the information contained in this report is intended for a business audience.

Beginning in 1996, the City of Phoenix Enterprise Community Job Linkages Initiative set out to increase employment in this distressed area by matching "local people with local jobs." Morrison Institute for Public Policy (School of Public Affairs, Arizona State University) participated in the development of the job linkages initiative and evaluated its two demonstration projects. This report provides the concluding evaluation information for the second project at Friendly House and presents the lessons learned across the job linkages activities.

Arizona is emerging from one of the worst state budget crises in the nation. Entering 2003, its projected deficit, measured as a percentage of the general fund, was the fifth largest in the country.1 The state had slashed spending in 2002 in the face of a $900 million deficit, but still faced a $400 million shortfall for fiscal year 2003 and an estimated $1 billion deficit in fiscal 2004. Although improved revenues have reduced the anticipated gap, fundamental underlying problems remain concerning the ability of lawmakers to control the budget. Some observers consider this a revenue problem, others a spending problem. Our concern in this paper is whether state lawmakers have enough control over either revenue or spending.