Fiscal Affairs Program

Governing for Results

Arizona

Links active December 2005

Overview: In the 1990s, Arizona completed a move from annual budgeting to biennial budgeting, adopted legislation requiring a shift to program budgeting by FY 2006, and created a program of targeted agency performance reviews now known as Strategic Program Area Reviews (SPAR). The state has not adopted performance budgeting, but these and other programs of budget reform will facilitate a shift to performance budgeting if in the future the governor and legislature decide to adopt it. In 2002, Arizona returned to an annual budgeting process for 17 of its largest state agencies, starting with the FY 2004 budget.

Studies: Review of budget reform in Arizona. Arizona in 1997 adopted legislation to require agencies to shift to program budgeting, a change that will facilitate performance reporting and evaluation because budgets will be structured for programs, not for line expenditures. (1997 Ariz. Sess. Laws, Chap. 210). All budget units are to be converted to program budgeting by FY 2006.
http://www.azleg.state.az.us/jlbc/budgetre.htm

Statutory Requirements:

§35-113 (establishment of program budgeting);
§35-115.5 (detailing the contents of budget reports, including identification of administrative expenses)
35-122 (requiring agency operating plans, five-year strategic plans, performance measures, and the master list of state government programs).
§41-1275 (the Strategic Program Area Review process).

Agencies:

Governor's Office of Strategic Planning and Budgeting.
http://www.ospb.state.az.us/

Joint Legislative Budget Cmmittee
http://www.azleg.state.az.us/jlbc.htm

Manual: 1998 Strategic Planning and Performance Measurement Handbook explains the process of strategic planning and performance measurement. http://www.ospb.state.az.us/handbook.htm

Strategic Planning: at this site, click on the button for "Strategic Planning Materials": http://www.ospb.state.az.us/02_planning.htm. Also see below.

Performance Measures: The Master List of State Government Programs is an annual report of the Governor's Office of Strategic Planning and Budgeting. It is a complete list of budget units, programs and subprograms. Its data on individual programs and subprograms include mission statements, strategic plans, descriptions of responsibilities and target clientele, program goals, key performance measures (almost entirely outputs, with occasional measures of client satisfaction), funding and agency FTE.
http://www.ospb.state.az.us/MasterList-page_1_20_04.htm

Performance Reports: Arizona Strategic Program Area Reviews involve agency self-assessment, as described below, and are a form of performance reporting. An explanation of the process and its results for the 2000 legislative session are available at this site: http://www.azleg.state.az.us/jlbc/budgetre.htm

Summaries of 2000 Strategic Program Area:
http://www.azleg.state.az.us/jlbc/02_03app/sparsumm.pdf (results of legislative discussion)
http://www.azleg.state.az.us/jlbc/ospb.pdf (reviews and recommendations)

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Posted October 2002, reviewed December 2005.
Email statebudget-info@ncsl.org for more information.
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