Here’s an early gift from Santa: Collections in Arizona grew by 8 percent last month compared to the year before.
Also last month, the unemployment rate dropped to 7.8 percent, which is the first in four years that Arizona’s jobless rate has fallen below 8 percent.
“Arizona’s economy appears to be gaining momentum, the best gift of all for the people of our state this holiday season,” Gov. Jan Brewer said in a news release.
The national unemployment rate is slightly better at 7.7 percent, but Brewer also noted that roughly one in every seven jobs that were created in the country last month was in Arizona.
The state added 22,000 jobs, which is also the largest job gain since 2005.
Of those new jobs, 96 percent were created in the private sector—another credible sign that the economy is rebounding.
Job gains were also seen in nine out of 11 sectors, notably in trade, transportation and utilities, where 12,800 jobs were created.
Brewer noted that over the year, nearly 60,000 jobs had been created.
“There are so many reasons for optimism in the latest jobs report,” she said.
The Joint Legislative Budget Committee, the Legislature’s fiscal research arm, said the growth in revenue collections was driven by robust income and sales tax collections.
JLBC said November saw a low amount of individual income tax refunds. In the meantime, the gains in sales tax collections were the biggest in 16 months.
Indeed, total collections were $17.7 million above the budget forecast. Year-to-date, state revenues are up by 4 percent compared to last year.
Even the state’s $450 million rainy day fund has accrued $1.8 million in interest earnings.
Also in its monthly fiscal highlight, JLBC said Arizona might get some windfall if Bush-era tax cuts expired on Dec. 31.
If they did, long-term capital gains and qualified dividends would go back to 20 percent while the tax rate of some high earners could increase to 39.6 percent.
This could impel more payments now to avoid higher taxes in January.
In fact, investors appeared to have already been taking steps to mitigate the impact of the expiration of the Bush-era tax cuts.
JLBC noted that several companies seemed to be paying significantly higher dividends in the last quarter of this year.
JLBC said as a result, investors’ personal income in 2012 could increase substantially, which could mean higher tax collections this coming April.
But JLBC cautioned that the gain would be short term and would be offset by lower income liability in future years.