The Arizona Department of Transportation was authorized in 1996 to administer a State Infrastructure Bank under a cooperative agreement with the Federal Highway Administration. The Highway Expansion and Extension Loan Program (HELP) was established. The financial statements present only the funds comprising the Fund and are not intended to present fairly the financial position or results of operations of the Department.

The HELP program is meant to be a funding tool to accelerate needed highway projects throughout the state. Board Funding Obligations are an important part of the HELP capitalization and the current stress on the State's General Fund has impacted our ability to use BFOs as a funding source for new loans. Though $140 million of BFOs are authorized by statute to capitalize the HELP, the State Treasurer was required to call all outstanding BFOs in April 2009. Consequently, the State Transportation Board and the Department have suspended the HELP program given the uncertainty of a long term funding source.

This paper complements a detailed assessment of job quality, based on analysis of industrial and occupational mix, recently completed by the Seidman Institute’s Center for Business Research. The overall conclusions in this report are consistent with those of the more extensive CBR research. Arizona’s economy grows very rapidly, but per person or per worker measures of wages, compensation, incomes, and gross state product are below the national average. No evidence exists that the situation is improving appreciably (or deteriorating). Indeed, the state appears to be creating income, wealth and quality jobs at rates that are similar to those displayed by other states. Arizona is a job-generating marvel and is among the nation’s leaders in aggregate growth. If the state is successful at improving the quality of its labor force and creating higher-quality jobs, its per worker and per person comparisons will improve.

Regional economic theory states that a local economy is driven by economic activities that import money into the region (county or state in this report) through the sales of goods and services to customers who do not live in the region. Such export activities differ from population-driven activities, which sell to and support the local population. “Export” in this usage is not limited to goods and services sold to customers from other countries, but includes all sales made to customers outside the local region — at the state level, in other states, and at the county level, in other counties within the state. An export activity sometimes is referred to as a “basic” activity — the terms are synonymous.