State revenue collections continued to grow at a double-digit clip in March as sales tax income came in above forecast and Arkansas individual and corporate taxpayers received fewer refunds ahead of the upcoming April 18 tax deadline.
The revenue report is also good news as Arkansas lawmakers head into the special session in Little Rock on April 6 to consider bills to expand Arkansas Works and create a managed care system for some Medicaid programs. That brief session, called by Gov. Asa Hutchinson, will be followed by the General Assembly’s 2016 fiscal session on April 13, which occurs every even-numbered year.
The state Department of Finance and Administration’s monthly revenue report shows net available general revenue for March totaled $413.7 million, $48.6 million or 13.3% above last year and $41.1 million or 11% above forecast.
March’s tax collections almost kept pace with last month’s surprising revenue report, when March net available general revenue came in at $279.9 million, $61.6 million or a whopping 28.2% above last year and $31.8 million or 12.8% above forecast.
Now nine months into the fiscal year that began in July, Arkansas’ year-to-date net available general revenues totaled $3.82 billion, which is $72.9 million above forecast and $123.0 million or 3.3% better than a year ago.
University of Arkansas at Little Rock economist Michael Pakko said nothing stood out for him in the monthly report, except for the fact that individual and corporate tax refunds are down and sales and use tax collections were up. Pakko said the slow pace of tax refunds could simply be an issue of timing and the fact that many Arkansas taxpayers have not had their taxes processed.
“The encouraging part for me in this month’s report is the sales and use tax collections,” said the UALR economist. “Those numbers indicate strong spending among (Arkansas) consumers.”
John Shelnutt, DFA director of economic analysis and tax research, said the fewer tax refunds could be caused by a pattern of delayed filing, but “we don’t know for sure.”
“April is the largest collection month of the year, and that is when we will get all the information in,” he added.
Shelnutt also noted that sales and use tax collections have been volatile in 2016 – below forecast in February, and well above estimates in March.
“But, when you average the two together, we are in line with the rest of the U.S. economy,” said the DFA economist. “But if we continue to see those numbers grow, then we can talk about whether or not the (Arkansas) economy is expanding.”