After lower-than-expected revenue numbers for the first month of the fiscal year, the state of Arkansas’s tax collections have picked up steam with the release of the latest monthly revenue report. The Department of Finance and Administration says that in August, the state collected $457 million dollars in gross general revenue and about $398.3 million in net available revenue. Both numbers come in above last year’s amounts and above this year’s forecast. So far this fiscal year (which began July 1) the state has collected nearly $927.8 million in gross revenue and about $801.4 million in net available revenue.
State economist John Shellnut says those revenue totals were helped by the strong August, after weaker collections in July.
“So, year-to-date, after two months the good results in August made up for the decline recorded in July. Over the first two months of fiscal year 2015, the state is now above forecast by 2.5 million [dollars] or 0.3 percent [in net available revenue],” he says.
The DFA reports that all the major revenue sources, including sales taxes, individual income and corporate income taxes showed increases compared to last year.
The state’s revenue projections account for tax cuts passed in the 2013 regular legislative session, he says.
“There was a delay put in there so they were not immediate. But they are phasing in now, affecting the current fiscal year. So they’re in the forecast. And some of them step up larger cuts later, in the next fiscal year,” he says.
The DFA projects that the various tax cuts to income, the agriculture industry, the natural gas sector, and to capital gains (along with other tax cuts) will contribute to a general revenue reduction of about $85 million dollars for the current fiscal year. Those tax cuts will be fully phased in next fiscal year, when the DFA predicts that the state will see a general revenue reduction of about $141 million dollars.