JLBC - Monthly Fiscal Highlights May 2020

Summary

Table of Contents

1716 W. Adams Phoenix, AZ 85007 Phone: (602) 926-5491

www.azleg.gov/jlbc.htm

This report has been prepared for the Arizona Legislature by the Joint Legislative Budget Committee Staff on May 20, 2020.

“April General

Fund revenue

collections

were $833.2

million, which

is a decline of

(32.7)%

compared to

the prior year.”

Summary • April Sales Tax Results ......................................... 1

• Year-to-Date Revenue Results ......................... 2

• Preliminary May Revenue Discussion .............. 2

• Other Economic Data ....................................... 3

April Revenues ........................................................ 3

Monthly Indicators ................................................. 6

JLBC Meeting Summary ........................................ 9

JCCR Meeting Summary ..................................... 10

Summary of Recent Agency Reports • ACA – Healthy Forests Incentive Program.... 11

• ADOT – ServiceArizona Report ....................... 11

April Spending ....................................................... 12

Arizona Economic Trends ................... Appendix A

April General Fund revenue collections were $833.2 million, which is a decline of (32.7)% compared to the prior year. While the April results represent a significant decline in state revenues, collections were actually $269.0 million above the 4-sector consensus revenue forecast presented at the April FAC meeting. These final April revenue numbers are generally consistent with the Preliminary April 2020 Revenue Update published by our office earlier this month. As discussed in the preliminary April update, we believe that the April forecast gains associated with Sales Tax and Individual Income Tax (IIT) withholding reflect higher-than-expected economic activity and represent a potential real gain to the forecast – based on the final April figures, this would represent $108 million of the $269 million overall forecast gain. The remaining $161 million of the forecast overage appears to be associated with the timing of revenue collections and will likely be reversed in future months. The preliminary April update described the results for the state's largest revenue categories, all of which declined during the month April, although for some categories the decline was not as sharp as forecasted under the recent FAC projections. At that time, however, we did not have revenue data for each Sales Tax classification (such as retail, contracting and restaurant/bar), which made it difficult to provide any context for the performance of April Sales Tax collections (which reflect March sales activity). Now that this Sales Tax data is available, below is some additional data describing the March sales activity.

April Sales Tax Results (March Sales Activity) As noted above, April Sales Tax deposits reflect March sales activity, which provides a first look at consumer behavior during the COVID-19 related shutdowns. Because the broad-based shutdowns did not occur until the middle of March, this data only provides a partial view of these impacts. • Retail – The retail category makes up half

of total sales tax collections retained by the state. While retail Sales Tax collections declined overall by (4.6)%, detailed data provided by DOR showed varied performance among different categories of retailers. The largest year-over-year declines in sales were incurred by clothing stores (49.6%) and motor vehicle dealers (17.8%). Among other retail subsectors that experienced losses were furniture and home furnishing stores (6.6%) and general merchandisers (0.5%).

• Restaurants and Bars – This classification declined by (33.7)%. By way of comparison, the prior largest decline in restaurant and bar sales was in January 2008, when year-over-year tax collections decreased by (11.3)%.

• Transient Lodging – This Sales Tax classification, commonly referred to as the hotel/motel bed tax, declined by (57.5)%. The decline is not surprising, given recent nationwide data indicating that hotel occupancy rates have dropped to 30%.

• Amusements – This category, which includes admission fees for movie theaters, amusement parks and sporting events, declined by (53.5)%.

2 JLBC – MONTHLY FISCAL HIGHLIGHTS – MAY 2020

Summary (Continued)

Year-to-Date Revenue Results/Operating Balance Year-to-date through April, excluding Urban Revenue Sharing and fund transfers, FY 2020 General Fund revenues were 2.7% above the prior year. The state’s fiscal health can also be measured by the operating fund balance. The state pays its bills out of the operating fund balance, which consists of the General Fund and certain dedicated funds. The operating balance as of mid-May 2020 is $4.04 billion. The large increase in the state's operating balance is the result of receiving monies from the CARES Act state/local government aid allocation, known as the Coronavirus Relief Fund (CRF). CRF monies are subject to significant restrictions on their use and the state has not expended any of these monies to date at the state level. Preliminary May Revenue Discussion Our office plans to provide a preliminary update on May revenues by June 8th. Since that preliminary report will not occur for several weeks, below are some observations on the first 2 to 3 weeks of May revenue data. Sales Tax – May Sales Tax deposits (based on April sales) are not due until the end of the month, so there is insufficient data to report any conclusions for April sales activity in Arizona. When this data is available, it will cover the first complete month of sales data under the COVID-19 shutdown. In terms of national data, the US Census Bureau's Monthly Retail Trade Survey indicates that retail sales declined by (17.3)% in April compared to April 2019. When reviewing data from other states, Pennsylvania has reported real-time information based on April sales – there, Sales Tax collections declined by (35)% due to lower April sales activity. However, given the varying taxable status of certain goods and different state economies, it is difficult to know how this other data will translate into Arizona Sales Tax collections. IIT Withholding – In the first 3 weeks of May data, withholding has posted a (1.9)% decline compared to May 2019. While this does represent a decline in revenues, this drop is less than expected given the historic level of job losses and unemployment benefit claims. Some potential reasons for this overperformance include: 1) Withholding from unemployment insurance (UI)

benefit checks has been offsetting lost withholding from regular paychecks

2) Recent job losses have been concentrated in low wage positions with below average wages. This would mean that for every (1)% decline in employment the state may not see a corresponding (1)% decline in the overall wage base.

3) Given the limited sample size of the May data (3 weeks), there is the potential for technical or timing issues to impact any analysis of the data.

IIT Payments – With the extension of the state's tax filing deadline, the April FAC forecast assumed that 90% of all final IIT payments would be deferred until July 2020. Through May 14th, the state has seen final payments drop by (94)% during May. This large percentage drop during May was expected – May 2019 collections included final payments still being processed from that year's April 15 filing deadline, while May 2020 so far only includes minimal final payments (less than $20 million) given the delayed filing deadline this year. At this point during May, estimated payments have declined by (80)% during May. While this drop is steeper than the FAC forecast projected for the 4th quarter of FY 2020, it is difficult to draw conclusions due to May being a smaller month for IIT estimated payments. This May estimated payment result is in contrast to April, which saw an increase in estimated payments (which were still due April 15th). Given the delay in the state's overall tax return deadline, DOR has had less overall returns to process. This may have allowed DOR to process estimated payments more quickly, shifting collections into April of this year. IIT Refunds – The recent FAC forecast assumed that IIT refunds during FY 2020 would generally increase due to the enacted tax reductions from last session and the assumption that only 10% of tax filers with a refund would take advantage of the delayed filing deadline and defer their return until July. During April, IIT refunds were actually less than expected, leading us to speculate that refund filers may have lacked access to tax preparation services due to COVID-19 business closures. In contrast to the April refunds result, the amount of IIT refunds issued in May through May 18th have increased by 70% during the month. While the exact reasons for this increase is unclear, refund filers may be: 1) Taking advantage of tax preparation services under the gradual re-opening of business; or 2) More incentivized to file and access their refunds payments given ongoing economic stress from the COVID-19 pandemic. Corporate Income Tax – Through May 18th, CIT revenues have declined by (59)% so far during May. As we have noted previously, the CIT category is particularly sensitive to changes in economic conditions, with the category having declined by (48.5)% during April. Given that May is a smaller

3 JLBC – MONTHLY FISCAL HIGHLIGHTS – MAY 2020

Summary (Continued)

April Revenues

Table 1

General Fund Revenues ($ in Millions)

FY 2020 Collections

Difference From April FAC Forecast

Difference From FY 2019

April $ 833.2 $ 269.0 $ (404.6) Year-to-Date $ 8,771.7 $ 269.0 $ 77.1

Sales Tax collections of $447.9 million were (5.1)% below April of last year and $56.9 million above the April FAC forecast. Year-to-date, collections are up by 6.9%. April collections reflect sales that occurred in March. The first executive order to protect against COVID-19 was issued on March 19. Therefore, the impact of COVID-19 primarily affected sales that occurred in the second half of March. The first month to be fully impacted by the pandemic is April, and taxes collected from sales occurring in this month are not remitted to the state until late May. Sales tax collections by category for April are shown in Table 2. The 5 major categories of the state’s sales tax shown in the table account for approximately 90% of total collections. (See the Summary Section for more information on April Sales Tax collections)

Table 2 Sales Tax Growth Rates Compared to Prior Year

April YTD Retail (4.6)% 5.7% Contracting 18.6% 15.7% Use (1.4)% 5.8% Restaurant & Bar (33.7)% 0.8% Utilities (4.2)% (5.5)%

Individual Income Tax net revenue of $333.9 million in April was (49.3)% below the prior year and $232.3 million above the April FAC forecast. Through April, year-to-date net collections are down by (3.5)%. As indicated in Table 3, April withholding revenues of $411.0 million were (3.1)% below last year and $50.6 million above the April FAC forecast. The decline in withholding may have been less than expected due to employment losses being concentrated in lower wage jobs, along with the impact of the state withholding income tax from unemployment benefits. Year-to-date, withholding is up by 7.5%.

month for CIT collections, we do not yet know whether the May results indicate a worsening performance for the category. June will provide more data for CIT, as that month typically contains significant levels of corporate tax payment activity. Other Economic Data As other indicators of the economic conditions during the COVID-19 pandemic, below is recent data for several state programs: AHCCCS At the beginning of May 2020, the total AHCCCS caseload was 1.90 million members. Total monthly enrollment increased 1.9% for May and increased 4.3% compared to a year ago.

TANF and SNAP The state has recently seen significant increases in its federally-funded Temporary Assistance for Needy Families (TANF) and Supplemental Nutrition Assistance Program (SNAP) programs serving low-income individuals. The TANF and SNAP programs are not funded from the state General Fund. Based on preliminary April data, TANF caseloads increased by 24.4% from March and by 20.3% above April 2019. Total caseload is now 15,720. Additionally, the April SNAP caseload increased 7% over March and 9% over April 2019. Total caseload is now 866,704. Average SNAP case payments have increased approximately $95 or 37.9% from March as a result of emergency allotments from the Families First Coronavirus Response Act (aka “COVID 2”).

4 JLBC – MONTHLY FISCAL HIGHLIGHTS – MAY 2020

April Revenues (Continued)

April estimated and final payments of $180.8 million were (70.0)% below the prior year and $43.7 million above the April FAC forecast. Notably, estimated payments increased by 16.4% whereas final payments declined by (79.3)%. The increase in estimated payments may have been due to DOR being able to deposit estimated payments more quickly than normal owing to the 90-day filing deferral for final payments. The amount of refunds in April totaled $(258.0) million, which is a decrease from the $(368.8) million amount last year. With a forecasted refund level of $(395.9) million, the lower level of actual refunds produced a forecast gain of $137.9 million. The much lower-than-expected refund level in April is likely attributable to the 90-day filing deferral discussed earlier. While the deferral primarily affected April final payments, it also appears to have had a larger-than-expected impact on refunds. People who over-withheld their state income taxes in 2019 are owed a refund when they file their return in 2020. For this reason, such individuals would benefit from filing their return by the original due date of April 15. One reason that these individuals did not file in April may have been the lack of access to tax preparation services due to COVID-19. Statistics released by the Internal Revenue Service indicates that approximately 55% of all electronic tax filings are done with the help of tax preparers. In the month of April, the cumulative number of electronic tax filings prepared by tax professionals declined by more than (20)% over the prior year. We expect that the refunds will be shifted to the period between May and the July 15 filing due date. Table 3

Individual Income Tax Growth Rates Compared to Prior Year

April YTD Withholding (3.1)% 7.5% Estimated/Final Payments (70.0)% (28.0)% Refunds (30.1)% 5.8%

Corporate Income Tax net revenue was $50.4 million in April, which was (48.5)% below the April 2019 level and $(7.4) million below the April FAC forecast. The $50.4 million net amount collected in April is the lowest level for this month in 28 years. Through April, net corporate income tax revenue was up by 18.0%.

Insurance Premium Tax net collections were $27.0 million in April, which was (29.5)% lower than last year and was $(10.0) million below the April FAC forecast. Year to date through April, insurance premium tax revenue is down by (1.3)%. This month's decline is caused by issuance of refunds. Due to a delay in receiving April tobacco and liquor tax revenue data, April collections are reported at forecast. The Lottery Commission reports that April ticket sales were $98.2 million, which is $8.3 million, or 9.8% above sales in April 2019. Year-to-date, ticket sales are $853.6 million, which is (5.1)% below sales in the prior year. General Fund distributions were $16.5 million in April, $(4.0) million lower than forecast. Highway User Revenue Fund (HURF) collections of $119.3 million in April were down by (13.5)% compared to same month in the prior year and were $(23.6) million below forecast. Year-to-date, collections have increased by 0.5% above the prior year and are $(34.4) million below forecast. Due to delays in reporting final March revenues for various revenues sources, DOR has made technical adjustments to prior month collection figures. For March, DOR has increased the amount of prior General Fund revenue collections by $3,000 and this adjustment has been included in the reported year-to-date results.

5 Table 4

General Fund Revenue: Change from Previous Year and April FAC Forecast

April 2020

Actual ActualApril 2020 Amount Amount April 2020 Amount Amount

Taxes Sales and Use $447,930,583 ($23,965,707) (5.1) % $56,861,513 14.5 % $4,514,991,337 $290,496,820 6.9 % $56,861,512 1.3 % Income - Individual 333,923,441 (324,294,365) (49.3) 232,258,013 228.5 3,724,969,381 (135,438,989) (3.5) 232,258,012 6.6 - Corporate 50,440,771 (47,427,897) (48.5) (7,354,643) (12.7) 436,104,179 66,601,977 18.0 (7,354,644) (1.7)

Property 3,017,485 (2,880,539) (48.8) 2,069,080 218.2 21,414,062 (3,290,134) (13.3) 2,069,080 10.7 Luxury - Tobacco 1,801,817 (208,216) (10.4) 0 -- 18,123,275 389,266 2.2 0 0.0 - Liquor 3,403,422 157,879 4.9 0 -- 31,090,202 295,022 1.0 1 0.0 Insurance Premium 26,984,271 (11,287,409) (29.5) (9,971,660) (27.0) 397,114,959 (5,289,909) (1.3) (9,971,660) (2.4) Other Taxes 3,092,661 2,042,555 194.5 1,822,701 143.5 13,083,986 1,000,590 8.3 1,822,701 16.2

Sub-Total Taxes $870,594,451 ($407,863,699) (31.9) % $275,685,003 46.3 % $9,156,891,379 $214,764,643 2.4 % $275,685,002 3.1 %

Other Revenue Lottery 16,472,058 9,691,788 142.9 (3,965,467) (19.4) 99,629,233 16,743,156 20.2 (3,965,467) (3.8) License, Fees and Permits 2,353,414 404,398 20.7 153,121 7.0 27,798,083 1,293,509 4.9 153,121 0.6 Interest 2,811 (26,488) (90.4) (1,822) (39.3) (128,201) (1,681,343) (108.3) (1,821) 1.4 Sales and Services 2,890,010 973,971 50.8 942,346 48.4 18,100,687 (1,073,461) (5.6) 942,346 5.5 Other Miscellaneous 994,895 199,988 25.2 (484,773) (32.8) 24,414,394 11,509,150 89.2 (484,774) (1.9) Disproport ionate Share 0 0 -- 0 -- 0 0 -- 0 -- Transfers and Reimbursements (793,242) (1,002,494) -- (3,290,216) -- 39,640,068 945,361 2.4 (3,290,216) (7.7)

Sub-Total Other Revenue $21,919,946 $10,241,163 87.7 % ($6,646,811) (23.3) % $209,454,264 $27,736,373 15.3 % ($6,646,810) (3.1) %

TOTAL BASE REVENUE $892,514,397 ($397,622,536) (30.8) % $269,038,192 43.2 % $9,366,345,643 $242,501,016 2.7 % $269,038,192 3.0 %

Other Adjustments Urban Revenue Sharing (61,463,432) (5,229,729) 9.3 (0) 0.0 (614,634,318) (52,297,287) 9.3 (0) 0.0 One-Time Transfers 0 0 -- 0 -- 846,800 (97,511,256) (99.1) 0 0.0 Public Safety Transfers 2,122,109 (1,729,209) (44.9) (0) (0.0) 19,098,982 (15,562,881) (44.9) (0) (0.0)

Sub-Total Other Adjustments (59,341,323) (6,958,938) 13.3 % (0) 0.0 % (594,688,537) (165,371,424) 38.5 % (0) 0.0 %

TOTAL GENERAL FUND REVENUE $833,173,074 ($404,581,473) (32.7) % $269,038,192 47.7 % $8,771,657,107 $77,129,592 0.9 % $269,038,192 3.2 %

Non-General Funds

Highway User Revenue Fund 119,307,256 (18,578,419) (13.5) % (23,618,825) (16.5) % 1,270,279,778 6,015,466 0.5 % (34,432,996) (2.6) %

Percent Percent Percent Percent

Current Month FY 2020 YTD (Ten Months)

Change From Change fromApril 2019 April FAC Forecast April 2019 April FAC Forecast

6 JLBC – MONTHLY FISCAL HIGHLIGHTS – MAY 2020

Monthly Indicators

Some of the economic indicators listed below reflect a time period before the economic disruptions from COVID-19.

NATIONAL According to the U.S. Department of Commerce Bureau of Economic Analysis' first estimate, the U.S. Real Gross Domestic Product (GDP) fell at a seasonally adjusted annual rate of (4.8)% in the first quarter of 2020. Personal consumption overall declined (7.6)%. Of that category, consumption of durable goods decreased by (16.1)%, nondurable goods increased by 6.9%, and services decreased by (10.2)%. Business fixed investment declined by (8.6)%. The Conference Board’s U.S. Consumer Confidence Index, which is based on consumers' perceptions of current conditions, as well as their expectations 6 months into the future, decreased by (26.9)%, or 13.8 points, from March's revised 118.8 to 86.9 in April. This is the single largest decline on record due to a collapse in consumer spending. The labor index, which is calculated as the percentage of respondents who think that jobs are plentiful minus the percentage who think that jobs are difficult to find, decreased by (43.1) percentage points in April to a net value of (13.6). This negative net value indicates that workers perceive that jobs are difficult to obtain, which is consistent with widespread hiring freezes and layoffs occurring across the economy. According to the U.S. Department of Commerce Bureau of Economic Analysis, the U.S. Personal Consumption Expenditure (PCE) Price Index decreased by (0.3)% in March. Compared to March 2019, the overall price index is up by 1.3%. The "core" PCE price index excludes food and energy prices and is the Federal Reserve's (Fed) preferred inflation measure. This core index increased year over year by 1.7% in March, which remains below the Fed's inflation target of 2.0%. Consumer prices, which are measured by the U.S. Bureau of Labor Statistics Consumer Price Index (CPI), declined (0.8)% in April over the prior month, the largest monthly decline since December 2008. Compared to April 2019, the CPI increased by 0.3%. The gasoline index fell by (20.6)%, resulting in a (10.1)% decrease in the energy index. On the other hand, the food index rose 1.5%, which includes a 2.6% increase in the food at home index. Core inflation (all items less food and energy) fell (0.4)% for the month, the largest monthly decline in the history of the series (which dates to 1957). Compared to April 2019, the core CPI is up by 1.4%.

The Conference Board's U.S. Leading Economic Index decreased from 111.7 in February to 104.2 in March. Compared to March 2019, the index was down by (4.6)%. This was the largest decline in the data series' 60-year history. The steep decline was caused by record increases in initial unemployment claims and significant stock price declines. The sharp drop indicates that the US economy will be facing a very deep contraction.

ARIZONA Housing Single-family housing construction is increasing. In March, Arizona’s 12-month total of single-family building permits was 35,015, or 10.4% more than a year ago. The comparable single-family permit growth rate for the entire U.S. was an increase of 5.5%. The 12-month total of multi-family building permits has been up and down. In March, Arizona’s total of 15,843 multi-family building permits was 70.2% more than in 2019. Nationwide multi-family permits were 11.0% more than in 2019. Tourism Revenue per available room was $66.09 in March, (51.6)% below the same month in the prior year. State park visitation was 302,115 in March, (25.3)% below the same month in the prior year. Data for McFarland State Historic Park and Tubac Presidio State Historic Park were unavailable. As a result, they are not counted in the total visitation value. Ridership through Phoenix Sky Harbor Airport during March decreased (47.0)% below the prior year. Average Hourly Earnings The Average Hourly Earnings received by private sector workers in March was $27.12, which is (1.1)% lower than the average in the prior month. Year-over-year change in earnings decreased from 5.4% in February to 4.8% in March. State Agency Data At the beginning of May 2020, the total AHCCCS caseload was 1.90 million members. Total monthly enrollment increased 1.9% for May and increased 4.3% compared to a year ago. Parent and child enrollment in the Traditional population increased by 1.9% for May and was 4.3% higher than a year ago.

7 JLBC – MONTHLY FISCAL HIGHLIGHTS – MAY 2020

.(

Monthly Indicators (Continued)

Enrollment in KidsCare is 38,359 for May, an increase of 1.1% over April and 11.8% above last year. For May 2020, the childless adult population increased 2.5% compared to last month. At 349,161, this population is 9.0% higher than a year ago. In the adult Medicaid expansion program up to 133% of the Federal Poverty Level, enrollment increased 6.9% for April and totals 81,411 individuals. Enrollment is 5.1% higher than a year ago. Based on information the Department of Child Safety provided for March 2020, reports of child maltreatment totaled 46,495 over the last 12 months, an increase of 0.5% over the prior year. There were 14,189 children in out-of-home care as of February 2020, or 2.2% more than in February 2019. Compared to the prior month, the number of out-of-home children increased by 0.2%. There were 12,103 TANF Cash Assistance recipients in the state in March, representing a (2.9)% monthly caseload decrease from February. The year-over-year number of TANF Cash Assistance recipients has declined by (4.5)%. The statutory lifetime limit on cash assistance is 24 months. The Supplemental Nutrition Assistance Program (SNAP), formerly known as Food Stamps, provides assistance to low-income households to purchase food. In March, 810,157 people received food stamp assistance in the state, representing a 1.1% increase above February caseloads. Compared to March 2019, the level of food stamp participation has increased by 0.8%. According to the most recent information from the Administrative Office of the Courts, the Maricopa County probation weighted caseload was 28,383 as of March 2020. This was a decrease of (35) below the prior month, and an increase of 158 since last March. In addition, the state's non-Maricopa County probation weighted caseload was 20,004. This was an increase of 65 above the prior month, and an increase of 836 since last March. These figures represent standard and intensive probation weighted caseloads, including both adult and juvenile probation. Weighted caseloads do not represent probation headcounts. AOC counts certain probationers as more than 1 case. For example, adult probationers charged with crimes against children are counted as 3 cases. The Arizona Department of Correction's inmate population was 41,449 as of April 30, 2020. This was a decrease of (1.3)% since March 31, 2020 and a (2.0)% decrease since April 2019.

8 JLBC – MONTHLY FISCAL HIGHLIGHTS – MAY 2020

Table 5 MONTHLY INDICATORS

Indicator Time Period Current Value Change From

Prior Period Change From

Prior Year Arizona

Employment - Regular Unemployment Rate March 5.5% 1.0% 0.7% - Total Unemployment Rate (discouraged/underemployed)

1st Q 2020 9.2% (0.1)% 0.2%

- Non-Farm Employment - Total Manufacturing Construction

March March March

2,994,400 177,300 173,800

(0.2)% 0.2%

(0.3)%

2.2% 0.7% 4.1%

- Average Hourly Earnings, Private Sector March $27.12 (1.1)% 4.8% Building

- Residential Building Permits (12-month avg) Single-family Multi-family

March March

35,015 15,843

1.5% 1.6%

10.4% 70.2%

- Maricopa County/Other, Home Sales (ARMLS) Single-Family (Pending Sales)

March

5,770

(4.5)%

(3.4)%

- Maricopa County/Other, Median Home Price (ARMLS) Single-Family (Pending Sales)

March

$315,000

(1.3)%

10.5%

- Phoenix S&P/C Home Price Index (2000 = 100) February 201.46 0.7% 7.5%

- Maricopa Pending Foreclosures March 2,196 (1.1)% (16.2)% - Greater Phoenix Total Housing Inventory, (ARMLS) March 18,226 17.1% (21.3)%

Tourism - Phoenix Sky Harbor Air Passengers March 2,398,309 (36.5)% (47.0)% - State Park Visitors March 302,115 8.2% (25.3)% - Revenue Per Available Hotel Room March $66.09 (44.1)% (51.6)% General Measures - Arizona Leading Index – 6-month projected growth February 4.1% 0.5% 1.3% - Arizona Personal Income, SAAR 4th Q 2019 $342.1 billion 3.3% 5.8% - Arizona Population July 2019 7,278,717 N/A 1.7% - State Debt Rating Standards & Poor’s/Moody’s Rating Standards & Poor’s/Moody’s Outlook

May 2015/Nov 2019 May 2015/Nov 2019

AA / Aa1

Negative/Stable

N/A N/A

N/A N/A

Agency Measures - AHCCCS Recipients May 1st 1,900,362 1.9% 4.3% Acute Care Traditional 1,069,820 1.9% 4.3% Prop 204 Childless Adults 349,161 2.5% 9.0% Other Prop 204 182,224 0.1% (2.2)% Adult Expansion 81,411 6.9% 5.1% KidsCare 38,359 1.1% 11.8% Long-Term Care – Elderly & DD 67,060 0.1% 3.3% Emergency Services 112,327 0.4% (0.2)% - Department of Child Safety (DCS) Annual Reports of Child Maltreatment (12-month total)

DCS Out-of-Home Children

March

February

46,495 14,189

(0.5)% 0.2%

0.5% 2.2%

Filled Caseworkers (1406 Budgeted) March 1,314 (1) 23 - ADC Inmate Growth April 41,449 (1.3)% (2.0)% - Department of Economic Security - TANF Cash Assistance Recipients March 12,103 (2.9)% (4.5)% - SNAP (Food Stamps) Recipients March 810,157 1.1% 0.8% - Judiciary Probation Caseload Non-Maricopa

Maricopa County

March March

20,004 28,383

65 (35)

836 158

United States - Gross Domestic Product (Chained 2012 dollars, SAAR)

1st Q, 2020 (1st Estimate)

$19.0 trillion (4.8)% 0.3%

- Consumer Confidence Index (1985 = 100) April 86.9 (26.9)% (32.7)% - Leading Economic Index (2016 = 100) March 104.2 (6.7)% (4.6)% - Consumer Price Index, SA (1982-84 = 100) April 255.9 (0.8)% 0.3% - Personal Consumption Expenditure Price Index (2012 = 100)

March 110.5 (0.3)% 1.3%

9 JLBC – MONTHLY FISCAL HIGHLIGHTS – MAY 2020

JLBC Meeting Summary

At its April 2020 meeting, the Joint Legislative Budget Committee considered the following issues: Executive Session Arizona Department of Administration – Risk Management Services - Consideration of Proposed Settlements – The Committee approved several settlements under Rule 14, which requires Committee approval of Risk Management settlements above $250,000 pursuant to A.R.S. § 41-621(N). Arizona Department of Administration – Review for Committee of Planned Contribution Strategy for State Employee and Retiree Medical and Dental Plans – A.R.S. § 38-658A requires the director of ADOA to meet with and review for the Joint Legislative Budget Committee, in Executive Session, the planned contribution strategy for each health plan at least 10 days before ADOA enters into, or renews, contracts for medical and dental insurance coverage. The Committee gave a favorable review of the report with provisions. Consent Agenda Attorney General – Review of Report on Murdered and Missing Indigenous Women and Girls Study Committee Expenditure Plan – At its December 2019 meeting, the Committee favorably reviewed the expenditure of $125,000 to support expenses of the Missing and Murdered lndigenous Women and Girls (MMIWG) Study Committee but required that the AG provide an expenditure report by April 1, 2020, and stated that up to $95,000 would be considered for further Committee guidance at a future meeting. The Committee favorably reviewed the AG's expenditure report. The favorable review included the following provision: The Attorney General and the MMIWG Study Committee shall report on their progress to JLBC by June 5, 202O, for purposes of further Committee guidance at the June JLBC meeting. Attorney General – Review of Peace Officers Memorial Fund Transfer and Expenditure Plan – An FY 2020 General Appropriation Act footnote requires the AG to submit for Committee review its expenditure plan for the $1.0 million appropriation to the Arizona Peace Officer Memorial. The Committee favorably reviewed the AG's plan. The favorable review included the following provision: The Attorney General will return to the Committee for further review if any monies are expended on a purpose other than the Peace Officers Memorial.

Department of Child Safety – Review of FY 2020 Quarterly Benchmarks – An FY 2020 General Appropriation Act footnote requires DCS to submit for Committee review a quarterly report on benchmarks for assessing progress made in increasing the department's number of FTE Positions, meeting caseload standards for caseworkers, reducing the number of backlog cases and open reports, and reducing the number of children in out-of-home care. The Committee gave a favorable review of the department's FY 2020 first and second quarter benchmark reports. Department of Child Safety – Review of FY 2020 Line Item Transfers - An FY 2020 General Appropriation Act footnote requires DCS to submit proposed line item transfers for Committee review. The Committee gave a favorable review of the following transfers of Child Safety Expenditure Authority in FY 2020: $7,050,000 into the Congregate Group Care line item, $5,000,000 into the Foster Home Recruitment, Study and Supervision (HRSS) line item, $(5,050,000) out of the Caseworkers line item, $(3,000,000) out of the Out-of-Home Support Services line item, $(2,000,000) out of the Training Resources line item, and $(2,000,000) out of the Overtime Pay line item. The Committee's favorable review included the following provision: The Department of Child Safety shall report to JLBC on or before June 30, 2020 on the department's efforts to obtain reimbursement from the Coronavirus Relief Fund for the temporary group home rate increase implemented in March 2020 in response to statewide school closures associated with the COVID-19 pandemic. Arizona Department of Corrections – Review of FY 2020 Third Quarter Correctional Officer Staffing Report – An FY 2020 General Appropriation Act footnote requires ADC to submit for Committee review a quarterly report detailing correctional officers staffing levels. The Committee gave a favorable review to the department's third quarter report. Arizona Department of Corrections – Review of FY 2020 Proposed Bed Capacity Changes – An FY 2020 General Appropriation Act footnote requires ADC to submit for Committee review a report detailing proposed bed capacity changes in FY 2020. The Committee had previously reviewed ADC's reports at its September and December meetings. The Committee gave a favorable review of the department's revised changes. Department of Economic Security – Review of Developmental Disabilities Line Item Transfers – An FY 2020 General Appropriation Act footnote requires DES

10 JLBC – MONTHLY FISCAL HIGHLIGHTS – MAY 2020

JLBC Meeting Summary (Continued)

JCCR Meeting Summary

to submit a report for Committee review before transferring any funds into or out of certain Division of Developmental Disabilities (DDD) line items. The Committee gave a favorable review of the following FY 2020 Long Term Care System Fund transfers: $(5,100,000) out of the DDD Administration line item and $5,100,000 into the DDD Premium Tax line item. Department of Education – Review of AIMS Science Contract Renewal – A.R.S. § 15-741.03 requires the Arizona Department of Education to submit for Committee review its contract renewal for the statewide assessment in science. The Committee gave a favorable review of the contract renewal for the statewide assessment in science. Department of Transportation – Review of Motor Vehicle Modernization Project Annual Progress Report – An FY 2020 General Appropriation Act footnote requires ADOT to submit for Committee review its annual progress report on the Motor Vehicle Modernization (MvM) Project. The Committee gave a

favorable review of the report with the following provision: On or before July 31, 2020, ADOT shall submit to the Committee a report detailing revenue estimates for FY 2019, FY 2020, and FY 202I for the ServiceArizona vendor's fee retention. This report shall categorize the revenue as ServiceArizona retention, AZ MVD Now retention or any other retention and detail the revenue according to where it is deposited, including the ADOT Technology Reserve Fund, ADOT Portal Enhancement Fund, or any other ServiceArizona vendor accounts. The same report shall be submitted on July 3I, 2021 for FY 2020 - FY 2022 revenue estimates.

At its April 2020 meeting, the Joint Committee on Capital Review considered the following issues: Regular Agenda Arizona Department of Corrections – Review of Revised Scope of Lewis and Yuma Lock and HVAC Projects – The Committee gave a favorable review of the Arizona Department of Corrections (ADC) proposal for a change of scope to the Lewis and Yuma lock and HVAC projects. The proposal estimates total costs at $60.0 million. Total available resources are $54.0 million. The favorable review included provisions with reporting requirements and a provision requiring the department to comply with American Correctional Association (ACA) standards for locks being purchased and installed for this project. Arizona State University – Review of Building Infrastructure Project – The Committee gave a favorable review of $20.0 million in system revenue bond issuances to fund building infrastructure projects. Debt service payments will be paid through tuition. The favorable review included the standard university financing provisions. Arizona State University – Review of Classroom, Academic and Research Laboratory Renovations – The Committee gave a favorable review of $35.0 million in

system revenue bond issuances for classroom, academic and research laboratory renovations. Debt service payments will be paid through tuition. The favorable review included the standard university financing provisions. Consent Agenda Arizona Department of Administration – Consider Recommending FY 2020 Partial Rent Exemption – The Committee recommended partial rent exemptions for the Board of Homeopathic Medical Examiners and the Naturopathic Physicians Medical Board totaling $3,900. The Committee also recommended corresponding rent increases for ADOA-ASET and the Acupuncture Board of Examiners. Arizona Exposition and State Fair Board – Review of FY 2020 Capital Improvement Expenditures – The Committee gave a favorable review of $170,000 of the Arizona Exposition and State Fair Board's $1.3 million FY 2020 capital appropriation for 3 capital projects. The favorable review included provisions with reporting requirements. Arizona Game and Fish Department – Review of Building Renewal Reallocation Plan and Aquatic Research Center Capital Project – The Committee gave a favorable review of a $302,500 reallocation

11 JLBC – MONTHLY FISCAL HIGHLIGHTS – MAY 2020

JCCR Meeting Summary (Continued)

Summary of Recent Agency Reports

Arizona Commerce Authority – Annual Report on the Healthy Forest Enterprise Incentives Program – Pursuant to A.R.S. § 41-1516I, the Arizona Commerce Authority provided its annual May 1 report on the Healthy Forest Enterprise Incentives Program regarding the: 1) quantity and measured weight of qualifying forest products; 2) number of new full-time employees hired in qualified employment positions; and 3) number of full-time employees employed in qualified employment positions. In calendar year 2019 the total weight of qualified harvest, processed, or transported forest products was 791,645 tons compared to 619,007 tons in 2018. None of the 8 participating companies reported net new employment positions or existing full-time employment positions for income tax credits in 2017, 2018, or 2019. The Healthy Forest Enterprise Incentives Program allows businesses primarily engaged in the harvesting, initial processing, or transporting of forest products in Arizona to qualify for the following: a use and transaction privilege tax exemption on qualified purchases, a 50% reduction in the use fuel tax, a reduction in the assessment ratio of personal and

real property from 18.5% to 5%, an income tax credit of up to $3,000 per employee on new jobs created, and an income tax credit of up to $9,000 per employee for the cost of training. (Elliot Chau) Arizona Department of Transportation – Report on FY 2019 – FY 2021 Revenue Estimates for ServiceArizona Vendor Fee Retention – Pursuant to a provision from the June 2019 JLBC meeting, the Arizona Department of Transportation reported on the revenue estimates for FY 2019, FY 2020, and FY 2021 for the ServiceArizona vendor's fee retention, categorizing the revenue as ServiceArizona retention or AZ MVD Now. The report also included details regarding where the revenue is deposited, including the ADOT Technology Reserve Fund (ATR) and the ADOT Portal Enhancement Fund (APE). Table 6 below displays the estimated revenues for the ServiceArizona vendor's fee retention by fiscal year, totaling $15.2 million in FY 2019, $15.6 million in FY 2020, and $16 million in FY 2021. The department stated that these revenue estimates do not account for the effects of COVID-19 on operations or the economy. (Jordan Johnston)

of FY 2019 and FY 2020 building renewal monies and $678,500 for an Aquatic Research and Conservation Center Building funded through the Federal Bureau of Reclamation. The favorable review included a provision with reporting requirements. Department of Public Safety – Review of Remote Housing Replacement – The Committee gave a favorable review of the Department of Public Safety's (DPS) $2.4 million FY 2020 Capital Outlay Bill appropriation from the Board of Fingerprinting Fund for construction of new housing units for highway patrol troopers. The favorable review included provisions with reporting requirements.

Table 6 FY 2019 – FY 2021 ServiceArizona Fee Retention Estimates FY 2019 FY 2020 FY 2021 ServiceAZ Retention (ATR) $14,413,300 $14,592,700 $13,859,300 ServiceAZ Retention (APE) 810,500 829,600 0 AZ MVD Now Retention (ATR) __________0 ____160,600 __2,091,200 Total $15,223,800 $15,582,900 $15,950,500

12 JLBC – MONTHLY FISCAL HIGHLIGHTS – MAY 2020

April Spending

April 20Change From

April 19 Year-to-DateYTD Change from FY 19

AgencyAHCCCS 133.0 14.2 1,396.1 (122.3)

Corrections 75.9 (8.4) 980.9 39.6

Child Safety 22.5 (5.3) 286.4 2.3

Economic Security 10.1 (43.5) 721.2 97.3

Education 355.3 9.1 4,472.1 474.4

Health Serv ices 7.9 1.0 80.2 5.5

Public Safety 10.1 5.6 81.2 (16.2)

School Facilities Board 70.1 60.5 353.4 101.0

Univ ersities 74.8 12.9 651.6 45.1

Leaseback Debt Serv ice 0.0 0.0 77.7 (6.4)

ADOA 2010B Debt Payoff 0.0 0.0 189.5 189.5

Gov ernor Crisis Contingency Fund Deposit 0.0 0.0 50.0 50.0

Budget Stabilization Fund Deposit 0.0 0.0 271.1 271.1

Other 82.4 24.9 641.9 166.2

Total 842.1 71.0 10,253.3 1,297.1

Table 7General Fund Spending ($ in Millions)

April 2020 General Fund spending was $842.1 million, which is an increase of $71.0 million above April 2019. Year-to-date, General Fund spending of $10.25 billion is an increase of $1.30 billion above the prior year. (See Tables 7 & 8). • Year-to-date, Department of Education (ADE)

spending has increased by $474.4 million compared to the prior year. The FY 2020 budget added funding for: 1) a 5% teacher salary increase, which is the second year of a phased in 20% increase; 2) $136 million to continue the restoration of K-12 "Additional Assistance" funding.

• Year-to-date state spending has also increased due to several one-time spending issues:

1) The enacted budget authorized 2 deposits from the state General Fund to the Budget Stabilization Fund: $271 million in FY 2019 (which was made in June 2019) and $271 million in FY 2020. As of mid-August the entire FY 2020 deposit was completed.

2) The enacted FY 2021 budget authorized the deposit of $50 million into a Crisis Contingency Fund in FY 2020 to address the economic impacts of COVID-19. That deposit was made in March.

3) The enacted FY 2020 budget included $190 million for early payoff of the 2010B sale/leaseback agreement. That payoff was completed in February.

13 JLBC – MONTHLY FISCAL HIGHLIGHTS – MAY 2020

Agency April 20Change from

April 19 Year-to-DateYTD Change from FY 19

Deptartment of Administration/ADOA Capital 883.1 178.1 15,678.3 7,970.1 ADOA – Automation Projects Fund - - 11,100.0 6,100.0 ADOA – Sale/Leaseback Debt Service - - 77,709.3 (6,402.7)Office of Administrative Hearings 112.3 2.6 768.4 21.3 Commission of African-American Affairs 12.9 (0.4) 108.2 5.1 Department of Agriculture 1,016.9 401.0 8,437.9 371.3 AHCCCS 132,966.0 14,183.5 1,396,098.0 (122,274.9)Arts, AZ Commission on the 500.0 500.0 2,200.0 2,200.0 Attorney General 2,512.7 87.9 20,968.4 (316.2)State Board of Charter Schools 149.4 70.5 1,276.6 355.1 Department of Child Safety 22,452.2 (5,276.1) 286,364.8 2,251.4 AZ Commerce Authority 2,235.5 868.8 16,692.0 3,475.0 Community Colleges 24,567.5 10,230.6 95,597.2 40,132.8 Corporation Commission 83.3 (1.9) 535.7 (893.4)Department of Corrections 75,866.8 (8,385.1) 980,873.3 39,649.1 County Funding - - 10,650.7 (9,915.5)AZ State Schools for the Deaf & Blind 1,819.9 (547.2) 20,409.6 2,200.1 Office of Economic Opportunity 190.0 166.4 911.1 555.2 Department of Economic Security 10,053.0 (43,475.3) 721,160.7 97,323.0 State Board of Education 57.4 12.4 824.1 42.0 Department of Education 355,298.5 9,071.9 4,472,073.9 474,409.4 DEMA 691.9 52.7 10,852.0 4,967.1 Department. of Environmental Quality - - 200.0 200.0 DEQ – WQARF - - - - Office of Equal Opportunity - - - (0.1)State Board of Equalization 22.8 (1.3) 465.8 92.9 Board of Executive Clemency 104.5 32.2 839.7 (17.5)Department of Financial Institutions 81.1 (6.2) 1,419.5 (29.2)Department of Forestry and Fire Management 2,078.0 568.4 12,862.7 4,871.9 Department of Gaming - - 2,509.5 730.0 Governor/OSPB 587.1 (136.7) 8,519.7 (314.4)Department of Health Services 7,888.2 1,048.8 80,170.1 5,525.9 Arizona Historical Society 237.5 41.0 2,585.6 100.2 Prescott Historical Society of AZ 62.2 (1.9) 719.4 (8.0)Department of Housing 3,750.0 3,750.0 15,000.0 15,000.0 Independent Redistricting Comm. - - - - Department of Insurance 340.2 12.8 4,305.4 42.0 Judiciary

Supreme/Superior Court 17,493.4 6,816.9 94,112.9 9,961.1 Court of Appeals 1,254.5 102.7 13,386.3 341.5 Department of Juvenile Corrections 2,780.2 3,484.0 30,441.6 14,775.3

Table 8General Fund Spending

($ in Thousands)

14 JLBC – MONTHLY FISCAL HIGHLIGHTS – MAY 2020

Agency April 20Change from

April 19 Year-to-DateYTD Change from FY 19

State Land Department 737.4 (693.7) 8,927.2 (880.6) Legislature

Auditor General 2,655.3 543.0 18,657.1 424.8 House of Representatives 1,283.5 (446.3) 13,116.2 579.8 Joint Legislative Budget Comm. 170.0 7.4 1,959.6 (13.3) Legislative Council 437.1 (31.2) 5,429.7 38.4 Senate 878.7 60.5 8,933.4 726.3 Mine Inspector 72.1 4.3 943.6 21.7 Nav. Streams & Adjudication 9.6 0.7 91.2 (12.4)Phoenix Convention Center - - 23,500.0 503.7 Comm. for Postsecondary Ed. 4.8 4.8 1,676.9 30.1 Department of Public Safety 10,132.4 5,590.4 81,240.0 (16,152.5)Public Safety Personnel Retirement System - - 6,000.0 (1,000.0)Real Estate Department 176.9 28.6 2,004.0 7.1 Department of Revenue 1,939.7 (375.7) 24,542.6 1,189.0 Rio Nuevo Distribution - - - - School Facilities Board 70,091.3 60,484.4 353,399.7 100,979.3 Secretary of State 748.5 (2,790.7) 10,762.1 (4,373.3)Tax Appeals Board 37.4 1.0 242.0 5.3 Office of Tourism 2,053.5 204.4 8,214.0 1,102.0 Department of Transportation 30.5 (1,478.4) 29,076.6 17,284.5 Governor's Office on Tribal Relations 5.6 2.9 51.4 2.9 Universities Board of Regents 7,554.9 7,045.5 20,407.7 14,233.2 Arizona State University 30,520.7 4,116.7 286,958.3 13,972.4 Northern Arizona University 10,539.5 432.7 98,477.6 4,336.1 University of Arizona 26,186.0 1,282.9 245,716.0 12,512.3 Department of Veteran Services 685.8 (355.1) 8,562.5 3,609.9 Department of Water Resources 6,885.3 3,540.9 63,963.1 43,900.8 Other - State Treasurer/JP Salaries 111.4 3.4 868.2 (115.9)Other - ADOA 2010B Debt Payoff - - 189,545.0 189,545.0 Other - Governor Crisis Contingency Fund - - 50,000.0 50,000.0 Other - Budget Stabilization Fund Deposit - - 271,107.0 271,107.0 Other - - 115.3 42.2 Total 842,097.0 71,034.4 10,253,316.4 1,297,102.2

Table 8 (Continued)

Arizona Economic Trends

Page:

2……Total Non-Farm Employment3……Average Hourly Earnings – Private Sector4……State Sales Tax Collections – Retail Category5……State Sales Tax Collections – Contracting

Category6……Residential Building Permits

May 2020Appendix A

JLBC 22

Total Non-Farm Employment

2,1002,2002,3002,4002,5002,6002,7002,8002,9003,0003,100

Jan-

01Au

g-01

Mar

-02

Oct-0

2M

ay-0

3De

c-03

Jul-0

4Fe

b-05

Sep-

05Ap

r-06

Nov-

06Ju

n-07

Jan-

08Au

g-08

Mar

-09

Oct-0

9M

ay-1

0De

c-10

Jul-1

1Fe

b-12

Sep-

12Ap

r-13

Nov-

13Ju

n-14

Jan-

15Au

g-15

Mar

-16

Oct-1

6M

ay-1

7De

c-17

Jul-1

8Fe

b-19

Sep-

19

Thou

sand

s of J

obs

-10%-8%-6%-4%-2%0%2%4%6%8%

Jan-

01Ju

l-01

Jan-

02Ju

l-02

Jan-

03Ju

l-03

Jan-

04Ju

l-04

Jan-

05Ju

l-05

Jan-

06Ju

l-06

Jan-

07Ju

l-07

Jan-

08Ju

l-08

Jan-

09Ju

l-09

Jan-

10Ju

l-10

Jan-

11Ju

l-11

Jan-

12Ju

l-12

Jan-

13Ju

l-13

Jan-

14Ju

l-14

Jan-

15Ju

l-15

Jan-

16Ju

l-16

Jan-

17Ju

l-17

Jan-

18Ju

l-18

Jan-

19Ju

l-19

Jan-

20

Year

Ove

r Yea

r Gro

wth

(%)

2,994,400 jobs(March 2020)

2.2% Y/Y Growth(March 2020)

JLBC 33

Average Hourly Earnings – Private Sector

$19$20$21$22$23$24$25$26$27$28

Jan-

07

Jul-0

7

Jan-

08

Jul-0

8

Jan-

09

Jul-0

9

Jan-

10

Jul-1

0

Jan-

11

Jul-1

1

Jan-

12

Jul-1

2

Jan-

13

Jul-1

3

Jan-

14

Jul-1

4

Jan-

15

Jul-1

5

Jan-

16

Jul-1

6

Jan-

17

Jul-1

7

Jan-

18

Jul-1

8

Jan-

19

Jul-1

9

Jan-

20

$ / H

our

-6%-4%-2%0%2%4%6%8%

10%12%

Jan-

07

Jul-0

7

Jan-

08

Jul-0

8

Jan-

09

Jul-0

9

Jan-

10

Jul-1

0

Jan-

11

Jul-1

1

Jan-

12

Jul-1

2

Jan-

13

Jul-1

3

Jan-

14

Jul-1

4

Jan-

15

Jul-1

5

Jan-

16

Jul-1

6

Jan-

17

Jul-1

7

Jan-

18

Jul-1

8

Jan-

19

Jul-1

9

Jan-

20

Year

Ove

r Yea

r Gro

wth

(%)

4.8% Y/Y Growth(March 2020)

$27.12/ Hour(March 2020)

JLBC 44

State Sales Tax Collections – Retail Category

$100

$125

$150

$175

$200

$225

$250

$275

$300

Jul-0

6

Jan-

07

Jul-0

7

Jan-

08

Jul-0

8

Jan-

09

Jul-0

9

Jan-

10

Jul-1

0

Jan-

11

Jul-1

1

Jan-

12

Jul-1

2

Jan-

13

Jul-1

3

Jan-

14

Jul-1

4

Jan-

15

Jul-1

5

Jan-

16

Jul-1

6

Jan-

17

Jul-1

7

Jan-

18

Jul-1

8

Jan-

19

Jul-1

9

Jan-

20

$ in

Mill

ions

-20%-15%-10%

-5%0%5%

10%15%20%

Aug-

06

Feb-

07

Aug-

07

Feb-

08

Aug-

08

Feb-

09

Aug-

09

Feb-

10

Aug-

10

Feb-

11

Aug-

11

Feb-

12

Aug-

12

Feb-

13

Aug-

13

Feb-

14

Aug-

14

Feb-

15

Aug-

15

Feb-

16

Aug-

16

Feb-

17

Aug-

17

Feb-

18

Aug-

18

Feb-

19

Aug-

19

Feb-

20

Year

Ove

r Yea

r Gro

wth

(%)

(4.6)% Y/Y Growth(March 2020)

$233.3 Million(April 2020)

Excludes temporary 1-cent sales tax*January 2014 estimate adjusted downward by $30 million to reflect one-time category shift

JLBC 55

State Sales Tax Collections – Contracting Category

$0

$25

$50

$75

$100

Jul-0

6

Jan-

07

Jul-0

7

Jan-

08

Jul-0

8

Jan-

09

Jul-0

9

Jan-

10

Jul-1

0

Jan-

11

Jul-1

1

Jan-

12

Jul-1

2

Jan-

13

Jul-1

3

Jan-

14

Jul-1

4

Jan-

15

Jul-1

5

Jan-

16

Jul-1

6

Jan-

17

Jul-1

7

Jan-

18

Jul-1

8

Jan-

19

Jul-1

9

Jan-

20

$ in

Mill

ions

-50%-40%-30%-20%-10%

0%10%20%30%40%

Jul-0

6

Jan-

07

Jul-0

7

Jan-

08

Jul-0

8

Jan-

09

Jul-0

9

Jan-

10

Jul-1

0

Jan-

11

Jul-1

1

Jan-

12

Jul-1

2

Jan-

13

Jul-1

3

Jan-

14

Jul-1

4

Jan-

15

Jul-1

5

Jan-

16

Jul-1

6

Jan-

17

Jul-1

7

Jan-

18

Jul-1

8

Jan-

19

Jul-1

9

Jan-

20

Year

Ove

r Yea

r Gro

wth

(%)

Excludes temporary 1-cent sales tax

18.6% Y/Y Growth(April 2020)

$60.3 Million(April 2020)

JLBC 66

Residential Building Permits

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

100,000

Jan-

01Au

g-01

Mar

-02

Oct-0

2M

ay-0

3De

c-03

Jul-0

4Fe

b-05

Sep-

05Ap

r-06

Nov-

06Ju

n-07

Jan-

08Au

g-08

Mar

-09

Oct-0

9M

ay-1

0De

c-10

Jul-1

1Fe

b-12

Sep-

12Ap

r-13

Nov-

13Ju

n-14

Jan-

15Au

g-15

Mar

-16

Oct-1

6M

ay-1

7De

c-17

Jul-1

8Fe

b-19

Sep-

19

Build

ing P

erm

its

Single Family UnitMulti-Family Unit

- 35,015 Permits- 15,843 Permits

(March 2020)

12-Month Moving Sum