LITTLE ROCK — Buoyed by stronger-than expected collections of individual income tax and sales tax, state general revenue in August increased $24.9 million over August 2007.
Collections of $411 million amounted to a 6.4 percent increase over August last year, exceeding the state's forecast for August of this year by $14.8 million or 3.7 percent, the state Department of Finance and Administration said Wednesday.
The individual income tax and the sales tax are the two biggest sources of general revenue, each accounting for roughly half of the state's approximately more than $5 bil-lion in gross general revenue each year.
"We are glad to be up, but we don't want to read too much into these numbers," said Tim Leathers, deputy director of the department.
Income tax collections increased more than expected because some companies had an extra payroll in August compared with August last year, he said. That may be offset by lower collections in September, he said.
Leathers said gross receipts collections, which include sales and use taxes, increased more than projected largely because of increased prices for electricity and more people spending their federal economic stimulus checks.
Matt DeCample, a spokesman for Gov. Mike Beebe, said Beebe wants "at least three months of solid data" from the fiscal year that started July 1 before considering revising the forecast, which was set in May.
"We'll see where we sit when we get through September. We are about where we expected to be," DeCample said.
In May, the department revised its forecast for the current fiscal year, trimming it by $106.8 million and lowering the general revenue budget to $4.411 billion for the year. That's still an increase over general revenue spending in fiscal 2008, during which the state distributed $4.353 billion to be spent by state agencies.
Leathers told lawmakers in May that a "mild recession" was expected in Arkansas, with a slowing economy in the first half of fiscal 2009 and a slightly improving economy in the lasthalf.
Several lawmakers have questioned whether the forecast is too pessimistic, but they've generally praised the Beebe administration for taking a conservative approach to budgeting amid an uncertain economic outlook.
Beebe has said state officials would consider raising the forecast, allowing agencies to spend more, if the state's tax collections continue to outpace the forecast for several months.
A growing budget surplus and a healthy natural gas industry have helped Arkansas buck a trend of souring budgets in other states, according to the National Conference of State Legislatures.
Arkansas recorded a $176.5 million surplus in fiscal 2008, has $83 million left from fiscal 2007 and is collecting interest on the investment of state money not currently being spent on agency operations, state officials said.
Details on August's revenue:
Gross receipts, including sales and use taxes, totaled $191 million. That's an increase of $11.7 million (6.5 percent) over August 2007 and $7.9 million (4.3 percent) above the forecast.
Individual income tax of $170.8 million. That's up $15.1 million (9.7 percent) over August 2007 and $8.4 million (5.2 percent) above the forecast.
Corporate income tax of $11.5 million, an increase of $3.9 percent (50.9 percent) over August 2007 and $4.3 million (59.2 percent) above the forecast. Leathers said corporate income tax, which fluctuates widely each month, often is low in August.
For the first two months of this fiscal year, gross general revenue totaled $833.6 million,an increase of $36.1 million (4.5 percent) above the same period last fiscal year. That's $31.6 million (3.9 percent) above the forecast.
As general revenue comes in, the state makes about a dozen deductions that reduce the gross to a net figure that agencies may be authorized by the state's chief fiscal officer to spend. August's net was $350.7 million, up $16.2 million (4.8 percent) over August 2007 and $17.9 million (5.4 percent) above the forecast.
For the first two months of this fiscal year, the net totaled $721.9 million, an increase of $35.8 million (5.2 percent) from the same period last fiscal year and $38.8 million (5.7 percent) above the forecast.
The finance report said the net is above forecast primarily because of gains in gross receipts, individual income tax and a $13.7 million deposit in unclaimed property proceeds from the state auditor's office.
Arkansas, Pages 9, 16 on 09/04/2008