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State revenues drop slightly in August

State revenue collections are slightly off in August, the state’s budget analysts reported today.

The Joint Legislative Budget Committee said revenues dropped by $3.3 million compared to the same time last year.

It’s only the second time since July last year that monthly revenues have declined.

Compared to last May, revenues are down by $30 million, and year-to-date, the collection is $13 million below the enacted budget.

The drop in revenues doesn’t appear to indicate a slowing of the Arizona economy, which has been on a stable path to recovery.

Instead, budget analysts contributed the revenue decrease to a big, one-time corporate income payment the state received in August last year, which artificially boosted that month’s total haul.

But it’s not all gloomy news.

The Department of Administration finally released its official estimate of the ending balance for fiscal 2012, and the projected surplus is $427 million, which is slightly better than JLBC’s earlier forecast of $401 million.

The “extra” revenue puts the state in a better position this year, which is good news for lawmakers who might be staring at another budget deficit at the expiration next year of a temporary one-penny sales tax increase. A coalition is now spearheading the extension of the one-cent tax.  Many Republican legislators are against the extension.

There’s good news elsewhere, too.

Pending foreclosures in Maricopa County declined in August compared to July.

And while home prices slightly declined in July from the month before, the long-term trend still looks favorable.

Economists are generally upbeat about Arizona’s economy.

In a recent forum, economist Elliot Pollack said what is taking place is a severe cycle of up and down but economic factors suggest that Arizona is doing relatively well.

During the downturn, population growth stopped and jobs that came with it went away, Pollack said.

“When population growth starts again, a lot of those jobs will come back and that’s when the boom will occur,” he said.

The question is when the population will start to grow again, Pollack said, adding the answer depends on how quickly home prices rise nationally and how quickly people such as retirees and job seekers get the confidence again to come to Arizona.

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