POLICY POINTS
POLICY POINTS BRINGS RELEVANT DATA TO TIMELY PUBLIC POLICY ISSUES IN ARIZONA

Social Safety Net Stretched by Demand

ARIZONA
INDICATORS
VOLUME 1 / ISSUE 1
OCTOBER 2009
arizonaindicators.org

Nearly 900,000 Arizonans — roughly the number of residents in metro Tucson —
received food stamps, now known as the Supplemental Nutrition Assistance Program
(SNAP), in July 2009, a 35.6% increase since July 2008. The reasons are obvious: job
losses and a struggling state economy challenged by the sagging housing market and a
higher than average foreclosure rate.
Arizona’s business cycle has historically been more volatile than other states. When the
national economy is doing well, Arizona has done very well, and when the national
economy falters, Arizona
experiences even more pronounced
Retail Sales Dropped Dramatically with
losses. Now is certainly not an
Recession, Inflation-Adjusted Percent Change in
exception. When the state’s
Taxable Retail Sales
economy contracts, many are
15
affected. Many families, even some
12
who have never asked for
government assistance before, are
9
finding nowhere else to turn for
6
help.
3
Economists have shown that
Arizona’s recession began at the
end of 2007. Snapshots of jobs and
basic services in parts of 2007
through mid 2009 show the
connections between business
cycles and human services:
 According to the Arizona
Department of Commerce
Research Administration,
195,800 nonfarm jobs have
been lost since September
2008, and a total of 305,300
have been lost since the
recession began in December
2007.
 Arizona Heath Care Cost
Containment System
(AHCCCS) — this state’s
version of Medicaid —
provided health services to
1.3 million Arizonans in
August 2009. That’s an

0

Arizona Indicators is
an online information
resource and analysis
tool that centralizes
data about the state
and its communities.
Arizona Indicators
presents interactive
visualizations, clear data
descriptions, and public
opinion data in a broad
range of content areas.
This project is made
possible by generous
support from the Arizona
Community Foundation,
Arizona State University,
and Valley of the Sun
United Way.

-3
-6
-9
-12
1969 1971 1973 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007
1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006

Arizona

Maricopa

For more information,
contact Andrea Whitsett
at (602) 496-0217 or
andrea.whitsett@asu.edu.

Pima

Source: Arizona Department of Revenue.

Arizona’s Historical Ups and Downs,
Annual Percent Change in Real Earnings

Arizona Indicators is
a project managed by
Morrison Institute
for Public Policy.

12%

411 N Central Ave
Suite 900
Phoenix, Arizona
85004-0692
(602) 496-0900 Main
(602) 496-0964 Fax
MorrisonInstitute.asu.edu

10%
8%
6%
4%
2%
0%
-2%
-4%
-6%
1955 1959 1963 1967 1971 1975 1979 1983 1987 1991 1995 1999 2003 2007

United S tates

A rizona

Source: U.S. Department of Commerce, Bureau of Economic Analysis.

Morrison Institute
for

Public Policy

increase of 183,632 people (16.4%) over a year ago — and
a 20.5% increase since the beginning of the economic
downturn in December 2007.
 In July 2009, 894,269 Arizona residents received SNAP
compared to 554,389 in July 2007.
 The number of cash recipients through Temporary Assistance
for Needy Families (TANF) has remained stable because this
program’s eligibility guidelines are sufficiently low that it
serves those who have experienced poverty for some time
rather than those who have more resources or simply need
assistance for a short time.
As the demand for services continues to grow, state officials
struggle to keep the social safety net intact while dealing with
what is now estimated to be a deficit of nearly $2 billion.

Demand for Food and Health Supports Rise as
Employment Falls, Number of participants in SNAP,
AHCCCS, and TANF, July 2007-July 2009
1,400,000

ent

nrollm

SE
AHCCC

1,120,000
840,000

nts

ecipie

R
SNAP

560,000
280,000

TANF Cash Recipients

0
July 2007

July 2008

July 2009

Source: Arizona Indicators, Arizona Department of Economic Security
and Arizona Health Care Cost Containment System.

While everyone awaits economic recovery, Arizona’s resources
will continue to be stretched by new demand whether they
come from state or federal sources. AHCCCS has already been
impacted by budget cuts which were absorbed in part through a 5% reduction in
provider rates. The Department of Economic Security (DES), which administers the
federal SNAP and TANF programs, has had general fund cuts in excess of a quarterbillion in less than a year and a half. However, the Governor’s line-item vetoes have
shielded them from an additional $50 million in proposed cuts. One-time adjustments
and federal stimulus monies have helped Arizona recently, but another wave of cuts may
be on the horizon.

In response to the remaining deficit, and the need for additional information about
potential impacts, state agencies provided impact estimates to the Governor’s Office in
October. All agencies were asked, what cuts would you need to make to reduce costs by
an additional 15%? For all agencies, the potential impacts are severe. For example,
AHCCCS estimates they would have to defund the KidsCare program, which provides
health insurance to children in families who earn between 100% and 200% of the federal
poverty level (approximately
Employment Losses Are Clear, Percent Change in
$22,050 for an Arizona family of
four). This equates to 47,000 low- Arizona and U.S. Nonfarm Employment, 1990-2009
income children losing health
insurance. DES estimates that a
15% cut would result in a 20%
reduction in cash benefits for
39,000 families with 64,000
children, among other impacts.

If required to
reduce costs by an
additional 15%,
AHCCCS estimates
they would have to
defund the
KidsCare program,
causing 47,000
low-income
children to lose
health insurance.

As Arizona’s economy recovers,
the demand will retreat somewhat,
but how quickly that happens and
how far down it goes will depend
on the strength of Arizona’s
recovery and the quality of jobs
created in the future.
Source: Arizona Workforce Informer, Arizona Department of Commerce
Research Administration, February 26, 2009.

POLICY POINTS

OCTOBER 2009

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