State tax collections down, but decreases moderate
by April 2, 2010 10:05 am 75 views
Arkansas’ tax collections are down compared to comparable 2009 periods, but at least the rate of decline began to moderate in March.
Year-to-date (July 2009-March 2010) gross revenues totaled $3.922 billion, down 2.6% from the same period in the 2008-2009 period, and 0.1% above the forecast, according to a Friday (April 2) memo from the Arkansas Department of Finance & Administration. The year-to-date decline in the July 2009-February 2010 was 3%.
Gross receipts collection — primarily from sales and use taxes — for the fiscal year total $1.485 billion, down 7.7% compared to the same fiscal year period in 2008-2009. The year-to-date decline in the July 2009-March 2010 period was 7.8%.
March total collections were $455.1 million, up 0.1% compared to March 2009, and 0.6% above forecast.
John Shelnut, director of economic analysis and tax research for DF&A, said the March report — which primarily reflects February commerce — does provide a small measure of optimism that the state has seen the worst of the tax collection declines.
“But I would say it’s a little early to declare victory,” Shelnut said, adding that he does not yet see “signals for a significant rebound.”
The declines in tax collections have already resulted in two budget cuts. On Jan. 11, Gov. Mike Beebe announced a second round of budget cuts totaling $106 million. The first round of cuts, announced Oct. 20, cut $100 million from budget spending.
Year-to-date individual income tax collections total $1.793 billion, down 4.9% compared to the 2009 period but 0.1% above the forecast. The previous (July-February) year-to-date decline was 5.3%.
Shelnut said the income tax collection improvements are somewhat comforting considering the state’s unemployment situation. Arkansas’ unemployment rate rose to 7.7% in February after holding at 7.6% during the previous three months. The February 2009 rate was 6.8%.
March individual income tax collections totaled $194.9 million, down 1.6% compared to last year, and down 0.5% below forecast.