April tax revenues dip; Beebe pulls $17.4 million from rainy-day fund
by May 4, 2010 2:07 pm 71 views
An unexpected dip in April tax collections has caused Gov. Mike Beebe to shift $41 million in state funds, including using $17.4 million in a “rainy-day fund,” to keep state agencies and universities financially secure for the remaining two months of the state’s fiscal year.
April gross general revenues totaled $601.2 million, a decline of $49 million, or 7.5% compared to April 2009. The April collections were also 6.4% below forecasts, according to a report released Tuesday (May 4) by the Arkansas Department of Finance and Administration.
“Our overall economic trend remains positive, and if this anomaly had hit a few months ago, we might have been able to make up for it over time," Beebe said in a statement. “However, with only two months left in the current fiscal year, we are going to move other money, including rainy-day funds, to prevent any potential cuts in state services. We set aside rainy-day money for this exact type of scenario."
The statement from Beebe’s office says the $41 million budget dip will be made up with $17.3 million moving to a public school fund from the Education Facilities Partnership Fund; moving $6.3 million in federal reimbursements to prevent reductions in Medicaid services; and $17.4 million in rainy-day funds will be “made available to other state agencies and to institutions of higher education to prevent any loss of services.”
For the 10 months of fiscal year 2010 (July 2009-June 2010), the gross revenues are $4.523 billion, down $155.3 million (3.3%) compared to the fiscal year 2009 period. The collections are 0.9% below forecasts.
Year-to-date individual income tax collections are $2.158 million, down $142.3 million (6.2%) below the same period in 2009 and 1.7% below forecasts. Collections growth for individual monthly withholding is down 2.1% from year ago levels.
Gross receipts collections — primarily sales and use taxes — for the 10 months of fiscal year 2010 total $1.652 billion, down $122.9 million (6.9%) below the 2009 period and 0.2% above collections.
Lower collections during the fiscal year have twice forced Beebe to announce state budget cuts that total more than $200 million. Beebe on Oct. 20 initiated planned cuts of $100 million after collections were down 7.2% for the first three months of the fiscal year, and announced Jan. 11 cuts of $106 million.