In "Roadmap to Arizona's Economic Recovery," a general fund revenue forecast is presented which includes proposed changes to the revenue system. If the proposed changes are backed out of these figures, the baseline forecast can be obtained. This addendum provides detail on the Roadmap's revenue projection. the three key points are: 1) Arizona's economy is highly cyclical, growing much faster than the nation during economic expansions; 2) Revenues everywhere, but especially in Arizona, given its revenue structure, are much more cyclical than the overall economy; 3) the revenue forecast in the Roadmap is actually conservative. Revenues relative to the size of the economy remain below the historical norm, even in fiscal year 2015.

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.

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.