April gross tax revenue was up almost 4% compared to April 2016 and up almost 2% above the forecast, but it was not nearly enough to put a dent in the estimated $70 million fiscal year budget shortfall.
Year-to-date gross revenues totaled $5.416 billion, up just 0.4%, or $22.5 million compared to the same period in the previous fiscal year. Arkansas’ fiscal year ends June 30. The year-to-date revenue is also $87.5 million below the budget forecast, or down 1.6%, according to Tuesday’s (May 2) report from the Arkansas Department of Finance & Administration (DFA).
Income tax and sales and use tax revenue are the two biggest sources of state funding. Individual income tax revenue for the first 10 months of the fiscal year totaled $2.728 billion, $67.5 million above the same period in the previous fiscal year, but 0.4% below the budget forecast.
Sales and use tax revenue, considered an indicator of consumer spending, totaled $1.942 million year-to-date, up $19.3 million, or just 1% compared to the same period in the fiscal year 2016. The total revenue is also 3.1% below forecast.
Year-to-date corporate income tax revenue totaled $331.7 million, down $61.1 million, and below the budget forecast by 10.6%.
Gross tax revenue in April reached $824.3 million, up $30.6 million, or 3.9% compared to April 2016. The April tax revenue was 1.8% above the budget forecast.
Individual income tax revenue in April was $522 million, up 3.3% compared to April 2016, but 1.8% below forecast. Sales and use tax revenue was $190.2 million in April, down 1.3% compared to April 2016, and below the monthly forecast by 5.5%. Falling below the forecast for the two categories resulted in a $15.2 million loss for the state.
Making up that loss was a April corporate income tax of $78 million, up $22.1 million compared to April 2016 and up $31.7 million above the budget forecast.
“Results in April were positively impacted by a change in Corporate tax filing due dates compared to the monthly forecast. The timing shift involved Corporate Returns and Extension payments previously due in March and shifted to April in federal and adopted state law. The two filing categories involved in the positive shift into April are up $22.3 million from a year ago and $33.8 million compared to forecast,” John Shelnutt, director of Economic Analysis and Tax Research at DFA, noted in his April revenue report.
The dour revenue reports are part of what prompted Gov. Asa Hutchinson and the Arkansas Legislature to push during an ongoing special session for a rainy day fund. On Monday, after Gov. Hutchinson gave his opening speech ahead of the three-day session, Sen. Jim Hendren, R-Gravette, introduced Senate Bill 5 that would transfer funds of $105 million from the Arkansas Health Century Trust Fund to the newly created Long Term Reserve Fund. Legislative leaders are hoping to wrap up the session on Wednesday.
OTHER TAX REVENUE SOURCES
July-April 2017: $44.5 million
July-April 2016: $43.9 million
Games of skill
July-April 2017: $49.5 million
July-April 2016: $46 million
July-April 2017: $181.2 million
July-April 2016: $183.9 million
July-April 2017: $62.1 million
July-April 2016: $62.8 million