State Revenues Slightly Below Forecast After First Quarter

Arkansas revenue forecasters said the state’s tax collections are about 0.5% below forecast after the first quarter of the state’s fiscal year, which ended September 30.

Year-to-date net available general revenues totaled $1.322 billion, $1.3 million or 0.1% above year ago levels, but $7.1 million below expectations.

September saw broad below forecast results, according to the Department of Finance and Administration. John Shelnutt, head of DF&A’s Economic Analysis & Tax Research division, said net revenues were off $9.7 million, or 1.8%, during the month.
“September results were below forecast in all major categories of collections. Sales tax collections accounted for $8.1 million of the decline for the month against forecast,” Shelnutt said.

“Individual Income tax collections were down 1.5 percent from year ago results and below forecast by $4.1 million, largely due to payroll timing effects in the Withholding category. Quarterly Individual Estimated payments were in line with forecast. Corporate Income tax collections were $1.1 million below forecast,” he said.

Shelnutt added, “Among smaller revenue sources, tobacco was below year ago levels and below forecast. Gaming results again exceeded forecast and continued to display double-digit growth over year ago revenue.”

Here is how the big three categories for tax collections by the state trended in September:

• September Individual Income Tax collections: Individual income tax collections totaled $291.3 million. Collections decreased by $4.4 million, or -1.5 percent compared to last year. With respect to the forecast, collections were $4.1 million or -1.4 percent below forecast. A payroll timing factor was partly anticipated in the results for Withholding. Individual Estimated Tax payments due in September were down compared to the prior year but adequately anticipated in the forecast.
• September Sales and Use Tax Collections: September collections totaled $183.7 million, a decrease of $3.1 million or -1.7 percent from last year. Collections were below monthly forecast levels by $8.1 million or -4.2 percent.
• September Corporate Income Tax Collections: Business tax revenues totaled $77.0 million, an increase of $1.7 million from year ago, and $1.1 million or -1.4 percent below forecast.

You can read the full report here.