State Finances Boosted by Surprising Fiscal Year Surplus

$600 Million Windfall for 2024

According to the report of AZ Mirror, the state ended the 2024 fiscal year with a surprising financial surplus gathering almost $600 million more than expected in January. June alone brought in $248 million extra as noted by the Joint Legislative Budget Committee. In total, the state collected $563 million more than predicted and $412 million more than what lawmakers planned for in mid-June. This surplus will affect the budget for the next fiscal year but the exact impact won’t be known until next month when final spending numbers for June are available.

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A Boost to Budget Planning

One major reason for the extra revenue was Medicaid refunds which brought in $160 million. This happened because less money was spent on developmental disabilities and managed care programs made more profit than expected. Individual income taxes added another $156 million because fewer tax refunds were issued, and corporate income taxes contributed an additional $92 million by not dropping as much as anticipated. Insurance and sales taxes also did better than expected, bringing in $51 million and $49 million, respectively.

This strong financial performance is important because the fiscal year 2025 budget plan only expects a small $8 million surplus by 2027. With proceeds from unclaimed property reaching a record $211 million and boosting miscellaneous revenue by $41 million, the state’s solid financial end provides a helpful buffer. This unexpected surplus will play a key role in shaping future budget decisions and plans.

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