Marks the first time the Budget Stabilization Fund has been replenished since 2009
PHOENIX – State Treasurer Doug Ducey today announced that for the first time since June, 2009 the State of Arizona has set reserve money aside in a savings account to cushion future General Fund budget shortfalls. $450 million has been deposited in the Budget Stabilization Fund as prescribed by the Arizona Legislature and Governor.
Arizona’s Budget Stabilization Fund was enacted by the Arizona Legislature in 1990 to set aside revenue during times of strong economic growth to be spent during periods of weak growth or recession. In 2008 the fund had a balance of more than $700 million before it was drained in fiscal years 2008 and 2009.
“Arizona has worked hard to get its financial house in order,” said State Treasurer Doug Ducey. “In 2011 our state budget was described as being the most structurally broken of any other state on a per capita basis. Our 2012 and 2013 budgets have been balanced, and we’re setting money aside for 2014 and 2015. We simply can’t allow Arizona to dig itself into a hole again. I applaud the Governor and Legislature for the tough decisions they made to get us back on track.”
The National Conference of State Legislatures recently reported that 21 of 29 states projecting positive cash flow planned to put portions of it into reserves. As the economy has slowly picked up, Arizona revenues outpaced projections in FY 2012 resulting in an estimated $231 million General Fund ending balance. The state’s monthly average operating cash balance also increased 58 percent to $1.3 billion, which translates to $483 million more on average each day over FY 2011.
“This is the responsible way every family and small business has to budget,” added Ducey. “You cannot spend more than you generate, and it’s always nice to have a little bit socked away for an emergency. This fiscally responsible strategy will help us avoid the same dramatic reductions that were the result of poor long-term planning in the past the next time we find ourselves in a recession.”
The $450 million Budget Stabilization Fund has been invested in fixed income securities along with more than $4 billion of state agency funds managed by the Office of the Arizona State Treasurer. As a free transparency service to Arizona taxpayers you can access detailed information on all revenue and expenditures at www.AZCheckbook.com.
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