A report issued by the Arkansas Department of Finance showed tax revenue income for October has been consistently above forecasted amounts in all major areas. This follows after a record $1.6 billion budget surplus in the last fiscal year, which led to a controversial special session of the legislature to decide what to do with the surplus.
The tax cuts passed by that special session, which brought the state’s income tax to the lowest it has ever been, nevertheless do not seem to have prevented the revenue from growing faster than expected. The gross general revenue increased by $201.7 million since last October for a total of $2.01 billion. It might be said, however, that the 8.0% increase in net available general revenues over the last year, though 10% higher than forecasted, has only kept pace with the national rate of inflation, which sat at 8.2% in September.
Tax revenue from individual income taxes and sale and use tax increased over last year at 7.3% and 10% respectively, placing them 6.6% and 8.5% above forecasted levels. Corporate income tax, though accounting for far less income than individual income or sales and use taxes, exceeded expectations by a massive 41.6%, growing by $18.3 million from a year ago.
For many minor income sources, such as alcohol and tobacco, income also exceeded forecasts. Only insurance and racing taxes fell below forecasted levels, but the most severe decrease in income for any area was franchise taxes, which fell 52.6% from last year. Even in this case, income was above the Department of Finance’s forecast, which had expected an even greater decline.
Unfortunately for the state’s coffers, or fortunately for the taxpayer, income gains were somewhat offset by individual income tax returns of $16.9 million, exceeding forecasts by 28.8%. On the other hand, despite corporate income taxes being far above expectations, corporate tax refunds fell by $8.9 million.
Final calculations from the report leave a gross income for October of $66 million and a net available income of $49.2 million.