Arkansas ends fiscal year with $299.5 million surplus

Revenue growth from individual income tax payments created an Arkansas budget surplus of almost $300 million, with overall revenue during the fiscal year up 4.9%.

Tax collections during the recently completed fiscal year (July 2012-June 2013) totaled $6.214 billion, up 4.9% above the previous fiscal year and up 2.5% compared to budget estimates. One result of the gains was a budget surplus of $299.5 million.

Fiscal year 2013 marked the third consecutive year of year-over-year gains. Arkansas tax collections reversed a negative two-year slide in the 2011 fiscal year, with collections up 4.5% in the July 2010-June 2011 period.

State tax collections for fiscal year 2011 totaled $5.673 billion, up 4.5% above the $5.43 billion in the 2010 period. Total state revenue of $5.43 billion in fiscal year 2010 was 2.4% below the previous fiscal year and marked the second consecutive year of revenue decline.

The Arkansas Department of Finance & Administration reported the collections on Tuesday (July 2).

Full fiscal year individual income tax collections total $3.144 billion, 8.6% higher than the 2012 period, and ahead of budget estimates by 6.5%.

Sales and use tax collections for the fiscal year total $2.124 billion, up just 1.1% compared to the 2012 period, and 1.4% below forecast.

“Low growth in sales tax collections relative to FY 2012 reflect limited economic growth in wage income, higher payroll tax withholding at the federal level for social security tax, federal sequester spending cuts in government payrolls, and limited growth in taxable business activity,” John Shelnutt, head of the Department of Finance and Administration’s Economic Analysis & Tax Research division, said in the report.

Fiscal year corporate tax income was $431.1 million, down 1% compared to the 2012 fiscal year and 2.7% below forecast.

During June, the final month of the fiscal year, total revenue was $621.4 million, up 6.9% above June 2012 and 1.9% above the forecast. Individual income tax revenue in June was $285.4 million, up 12.5% compared to June 2012 and 9.1% above forecast. Shelnutt said one reason for the higher revenue was a 17.4% increase in estimated tax payments.

June revenue from sales and use collections, typically a sign of consumer spending and confidence, reached $183.9 million, up 3.1% compared to June 2012, but below the forecast by 0.9%.

OTHER TAX COLLECTIONS
Alcoholic beverage
July 2012 – June 2013: $52.6 million
July 2011 – June 2012: $50.8 million

Games of skill
July 2012 – June 2013: $35.9 million
July 2011 – June 2012: $27.4 million

Tobacco
July 2012 – June 2013: $230.3 million
July 2011 – June 2012: $239.9 million

Insurance
July 2012 – June 2013: $109.9 million
July 2011 – June 2012: $99.3 million