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SUMMARY
Arizona Revised Statutes §41-1954 requires the Department of
Economic Security (Department) to prepare annual population estimates of Arizona
counties, cities, and towns. Under Laws 2003, Ch. 119, for fiscal years 2007
through 2011, local governments may use these estimates instead of United States
census data to determine their share of state-wide revenues, such as motor
vehicle license taxes, and to determine local government expenditure limits,
which cap spending for each county, city, and town. Alternatively, communities
may continue to rely on decennial United States Census figures, or obtain a
special mid-decennial census or census survey. Because the decennial census in
later years may underestimate the population of growing areas, and special
censuses and surveys can be expensive, most local governments elect to rely on
the Department’s figures. The United States Census Bureau also prepares annual
census estimates; for Arizona the estimates date is July 1. However, the State
does not use these estimates because the Census Bureau does not complete the
city and town estimates until approximately 1 year after the July 1 estimates
date.
The Department does not prepare its estimates independently,
nor does it provide adequate quality assurance over the data or methods used in
developing them. As a result, the Auditor General recommends that the Department
develop a process to adequately ensure the quality of the estimates produced for
revenue-sharing and expenditure limit determination. In addition, the Department
should employ or contract with a professional demographer with a Ph.D. in
demography to ensure that it has the technical expertise necessary to prepare
population estimates based on sound methodology.
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