This is a summary of several reports related to government finance in Arizona that have been produced by the Office of the University Economist since December 2008. Some new information has been added in an attempt to provide a complete picture. The format of this report is a brief summary by issue, sometimes accompanied by a table or chart. References are provided to the report and the page number where additional detail can be found.

Volume I: Facts
Analyses of Arizona state government finance, using data of the Arizona Joint Legislative Budget Committee, and of the combined finances of all state and local governments within Arizona, using data of the U.S. Census Bureau. A historical perspective is provided for both datasets. For combined state and local government finance, comparisons are made to other states and to the national average. In addition, other measures of the tax burden by state are examined.

Volume II: Concepts and Issues
Addresses the conceptual and empirical relationships between taxes, government revenue, and economic growth. Also discusses current issues specific to Arizona state government finance. This is a revised version of the report "Tax Reductions, the Economy, and the Deficit in the Arizona State Government General Fund," incorporating new and updated material.

Volume III: Options for Managing the Arizona State General Fund
Presents options and offers recommendations for managing the Arizona state government general fund. The near-term budget deficit is addressed as well as ways to prevent budget deficits from recurring every time economic growth slows.

This ōban triptych depicts Minamoto Yoshitsune 源 義經 (center left) and his retainers after their victory over the troops of Minamoto no Yoshinaka at the battle of Hōjūjidono in 1184. The warrior monk Musashibō Benkei 武藏坊 辨慶 sits to the right of Yoshitsune. In the lower-right corner lie the decapitated heads of Nenoi Ōyata 根井 大弥太 and Gonrokurō 権六郎.

Public finance—taxes and other revenues collected by government and the expenditure of those revenues—always has been somewhat controversial because of wide philosophical differences among residents regarding the role that government should play in providing public services and in collecting taxes and fees from its residents. Recently, public finance in Arizona has become a prominent public issue due to the need to resolve the deficits that afflict state government and most county and municipal governments in Arizona.

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.

Research into the sensitivity and vulnerability of urban water systems in Arizona reveals that managers are more concerned about factors such as population growth projections, economic trends, and revenue flows. Reliance on groundwater resources in many cases obscures recognition of any direct impact of precipitation on water supply. Given the low level of perceived climate risk among many providers interviewed for this study, it would seem unlikely that climate information would be needed. However, pockets of sensitivity and vulnerability to climatic impacts do exist in the four study areas covered in this study.