Arkansas State Revenues Still Trending Upwards

With two months left in the current fiscal year, Arkansas finance officials say that gross receipts and individual income taxes combined with fewer refunds than expected are driving state revenues.

After 10 months of collections, year-to-date net available general revenues totaled $3.78 billion, up $190.3 million (+5.3%) above last year and $10.3 million (+0.3%) above a recently revised forecast from the Arkansas Dept. of Finance and Administration (DF&A).

"Individual income tax and gross receipts collections, the two largest sources of general revenue by type, continue to set the pace for growth relative to year ago collections. After ten months into the fiscal year, net available revenues are aligned with the revised official forecast and moderately above year ago levels," said John Shelnutt, head of DF&A’s Economic Analysis and Tax Research division.

Shelnutt’s comments in the monthly revenue report for April also suggested that a declining trend of tax refunds appeared to be a new norm.

"Year-to-date results also reflect performance boosted by lower than expected refunds in both individual and corporate income tax. The likelihood for a reversal of this refund trend later in the filing and processing season now seems remote. That will offset lower expected growth rates in estimated payments and returns," he said.

For the year, individual income taxes are up 6.9% from one year ago, while gross receipts – which include sales and use taxes and other consumer spending drivers – climbed 5.3% than this point last year. Corporate income tax collections fell 15.5% from last year’s levels, which DF&A officials said were high due to one-time gains in the prior year.

April’s individual income tax collections actually spiked 19.7%, while gross receipts during the month rose 3.8% over the previous April. During the month, corporate taxes rose 13%.