Posted 1/3/2013 09:36 am
Updated 2 years ago
LITTLE ROCK - Arkansas' revenues in December beat the previous year and expectations, fueled primarily by an increase in individual income tax collections, the state finance office said Thursday.
The Arkansas Department of Finance and Administration said the state's net available revenues in December totaled $456.5 million, $37.8 million higher than December 2011 and $17.5 million above what was forecast.
The state's revenues for the fiscal year that began July 1 total $2.4 billion, which is above the previous year by $90.8 million and $22.1 million above forecast.
"I think it shows an economy that's continuing to improve, but very slowly," said Richard Weiss, the department's director.
Most of the revenue boost came from increased individual income tax collections, which Weiss said was the result in additional pay days in December. Individual income tax collections totaled $243 million, which was $36.1 million above the previous year and $20.1 million above forecast.
Sales tax collections totaled $180.9 million, which was $4.4 million above the previous year and $2.9 million below forecast. Corporate income tax collections totaled $62.8 million, which was $4 million below the previous year and $6.3 million below forecast.
Thursday's revenue report was the last before lawmakers return to the Capitol Jan. 14 for this year's session. Gov. Mike Beebe said the numbers don't change his view that the state cannot afford additional tax cuts this year beyond a grocery tax reduction he's backed that would depend on some state obligations decreasing over time.
Beebe, a Democrat, has proposed reducing the state's grocery tax from 1.5 percent to 0.125 percent. The cut would eliminate all state sales tax on groceries except for a one-eighth cent tax for conservation approved by voters as part of a constitutional amendment.
The tax cut, which officials estimate would cost the state $69 million, would be triggered if obligations in several key areas decline by at least $35 million for six consecutive months. They include payments the state must make to three Little Rock-area school districts as part of a desegregation settlement and some state bond payments.
Republicans, who will control both chambers of the Legislature in this year's session, have said they want to see if there's room for other tax cuts. The competing tax cut ideas include reductions in the state income tax. Beebe said the triggered tax cut was the only way he could propose a reduction in a year where the state faces a $138 million shortfall in its Medicaid budget.
"I'd love to have tax decreases, and you know what my preferred choice is, but I don't know how we can do that in any way other than what I've suggested in good conscience with the Medicaid shortfall," Beebe said.
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