Gross tax revenue for 11 months of Arkansas’ fiscal year totaled $6.401 billion at the end of May, up 5.5% compared to the same period in 2018 and 3.1% above the budget forecast. The state’s fiscal year runs from July 1 to June 30.
Net available revenue during the 11-month period was $5.269 billion at the end of May, up 4.2% compared with the same cycle in 2018, and up $174.4 million, or 3.4%, above the budget forecast, according to Tuesday’s (June 4) revenue report from the Arkansas Department of Finance and Administration (DFA).
DFA economist John Shelnutt said it was a “good month for state revenue collections” with some sales tax revenue shifted from April to May because of the Easter holiday schedule. He also said 4.4% growth in payroll tax revenue indicates an overall healthy economy.
“The YTD (year-to-date) growth was 4.4% Y/Y for the 11-month period versus the same 11 months in the prior year,” Shelnutt said in a note to Talk Business & Politics. “These growth rates reflect relatively high and stable growth that is consistent with the labor market indicators of full employment.”
Year-to-date individual income tax revenue was $3.191 billion, up 4.2% compared with the previous fiscal year period and 2.1% above the budget forecast. Year-to-date sales and use tax revenue was $2.255 billion, up 2.2% compared with the same period in the previous fiscal year, but 1.2% below the forecast. Year-to-date corporate income tax revenue was $497 million, up $153.7 million from the same period in fiscal 2018 and 44.3% above the budget forecast.
Gross revenue in May was $496.2 million, up 4.9% compared with May 2018 and 2.3% above the budget forecast. Net available revenue in May was $378.6 million, up 9% compared with May 2018 and 7.2% above the forecast.
“All major categories of revenue collections were above forecast in May. Individual income tax collections exceeded forecast and year ago collections with sustained growth in Payroll Withholding,” Shelnutt noted in his revenue report. “Sales Tax collections were above forecast with gains in most sectors including Motor Vehicle Sales Tax and restaurant sales.”
Gov. Asa Hutchinson said the surplus should be secured for years when the state’s economy slows down.
“From consistent growth in payroll withholding to improved sales tax collection, this report reflects a healthy and expanding Arkansas economy. As a result of a conservative budget and a dynamic economy, the state should finish out the fiscal year with a surplus. Today’s announcement of future layoffs by Georgia Pacific is a reminder that we need to continue building our reserve accounts to weather any future slow-down of the economy,” the governor said in a statement from his office.
Georgia-Pacific announced Tuesday it is shutting down the bleached board operations at its Crossett facility in south Arkansas as of October 2019. About 555 jobs will be impacted by the closure. Also, the timber and paper giant will close a particleboard facility in Hope, laying off 100 workers.
OTHER TAX REVENUE SOURCES
July-May 2019: $53.5 million
July-May 2018: $52.1 million
July-May 2019: $63.5 million
July-May 2018: $58.9 million
July-May 2019: $195.2 million
July-May 2018: $200.9 million
July-May 2019: $65.4 million
July-May 2018: $63 million
Miscellaneous (Severance, corporate franchise, real estate transfer, dyed diesel)
July-May 2019: $76.7 million
July-May 2018: $77.3 million