Boosted by a record-strong June month of tax collections, Arkansas state government ended its fiscal year on June 30 with a $145.6 million budget surplus.
The final tally was 3.2% higher than forecasters predicted.
Individual and corporate income tax collections aided the strong conclusion to the fiscal year, as did a surprising uptick in consumer and business spending.
“Sales and Use tax growth recovered in both consumer and business activity during the second half of the fiscal year, after a weak start in the first half,” Dr. John Shelnutt, Director of Economic Analysis and Tax Research at the Arkansas Department of Finance and Administration noted.
For the full fiscal year, net available general revenues topped $4,75 billion, a new record for a fiscal year. The amount is $178.7 million or 3.9% above last year.
For the year:
- Individual income taxes totaled $2.895 billion, 5.7% above last year and 2.1% above forecast.
- Corporate income taxes totaled $435.3 million, an 11.2% increase from last year and 11% above forecast.
- Gross receipts, which include sales and use taxes, totaled $2.128 billion, up 2.7% from the previous year and 0.5% above forecast.
Special revenues of note included:
- Soft drink taxes — earmarked for the Medicaid Trust Fund — totaled $46.8 million, up 0.7% from last year
- Alcohol taxes totaled $33.5 million, up 1.7% above last year and on target with respe
ct to forecast.
- Tobacco taxes totaled $239.9 million, up 0.1% above last year and 4.2% above forecast.
- Insurance taxes totaled $99.3 million, down 13.3% from one year ago, but 4.2% above forecast.
- Racing taxes totaled $3.4 million, down 14.7% from one year ago and 6.2% below forecast.
- Games of skill taxes totaled $27.4 million, up 84.8% from the previous year and 11% above forecast.
For the 2013 legislative session, lawmakers and Gov. Mike Beebe will begin the process of deciding how to spend the budget surplus from this year and money leftover from last fiscal year's $72.2 million surplus, which has been spent down on several stop-gap funding needs.
Often, surplus funds are used to pay for one-time capital projects through the legislature's General Improvement Fund (GIF) appropriations.
However, Arkansas is facing a $250-$400 million shortfall in its Medicaid program. Beebe and legislators have publicly discussed using surplus funds to address this projected deficit.
You can access the full revenue report here.