LITTLE ROCK — Saying Arkansas is in a more comfortable budget position, the state finance department director announced Tuesday that general revenue jumped $22.3 million — or 4.6 percent — above the state’s forecast for March.
Revenue rose to $508.3 million, an increase of $24.5 million, or 5.1 percent, compared with March of last year.
The department’s monthly report states that individual and corporate incomes taxes are above forecast, while sales-tax collections, known as gross receipts, are below forecast for the fiscal year to date. However, income-tax refunds, known to be a volatile part of the state budget, slowed from previous months.
“I think at this point that makes us a lot more comfortable than we have been in terms of our forecast holding and being good,” Richard Weiss, director of the Department of Finance and Administration, told reporters regarding the report.
Still, Weiss said he wants to see April’s revenue report before he is prepared to say whether Arkansas will have a surplus in fiscal 2013, or whether the forecast should be adjusted.
“I think at this point that makes us a lot more comfortable than we have been in terms of our forecast holding and being good,” Weiss said. “Things are slowly getting stronger overall. We’re still cautious about it, we’re not willing to declare victory at this point by any means, but it’s certainly a good collections report.”
Weiss said the positive report is due in part to a higher number of tax refunds having been processed, despite the April tax deadline.
The state already has disbursed about $479 million in refunds to taxpayers this fiscal year. These included $138.3 million to individuals and $340.6 million to corporations.
“It’s kind of a reverse of last month [February], where we had just a big wad of refunds that we had processed earlier, and because of that, that caught back up this month [March],” Weiss said. “I think that we have pretty well evened out at this point, but you still have April that you worry about.”
Gov. Mike Beebe also cautioned that it is too early to get excited.
“I’m encouraged, but we look for trends, we don’t look for month to month,” Beebe said. “The bottom line is anytime you’re $20 million in a month over gross and $40 million in a month over net on forecast, it’s much better than being the other way. And also, if the trend holds true, it provides us some opportunities for assisting the future Medicaid issues.”
The state Department of Human Services estimates that a $350 million to $400 million Medicaid shortfall will occur in Arkansas in fiscal 2014.
Another tax analyst at the state Capitol, Richard Wilson, assistant director of the Bureau of Legislative Research, said the early refunds and a very conservative forecast mean “the surplus as expected by the [bureau] is beginning to show up.”
March’s $508.3 million in collections was a record for the month. The previous high was $483.8 million in March 2011, said Whitney McLaughlin, a tax analyst for the finance department.
The department, in its monthly report, said individual income-tax collections accounted for $221.8 million of the general revenue. That’s an increase of $18.8 million, or 9.2 percent, compared with March last year. Collections were $15.5 million, or 7.5 percent, above the March forecast for this category.
Corporate income-tax collections accounted for $59.7 million of the general revenue. That’s an increase of $1.6 million, or 2.8 percent, compared with March last year. Collections met the forecast.
March gross-receipts collections (sales and use taxes, and some beverage-excise and other taxes) totaled $174.7 million, an increase of $8.2 million, or 5 percent, from March last year. Collections were above the month’s forecast by $2.9 million, or 1.7 percent.
Weiss called gross-receipts collections “fairly weak and fairly spotty.” He said that gross receipts still haven’t made the forecast for the fiscal year “but we’re ahead of where we were last year.”
Tax refunds and several government expenditures come off the top of “gross” general revenue, leaving a “net” that agencies are allowed to spend. In March alone, the refunds were $100.6 million to individuals and $1.7 million to corporations.
In the first nine months of the fiscal year, which started July 1, the state is $93.1 million, or 2.3 percent, over forecast for gross revenue collections, and $62.6 million, or 1.9 percent, above the state’s forecast for net available of $3,346.8 million.
According to the department, March’s revenue included:
$19.9 million, or 2.1 percent less in tobacco tax collections compared with March 2011. That is $800,000, or 4.4 percent, above forecast. The report attributes the change to uneven patterns of stamp sales to wholesale producers.
$36 million in gross special revenue to the Educational Adequacy Fund. After deductions the net amount is $34.8 million. The March 2012 collection is 5.3 percent larger than the March 2011 collection.
The special revenue come from state sales and use taxes on selected services, vendingmachine decal fees and corporate franchise taxes.
The state’s monthly revenue report can be viewed at www.dfa.arkansas.gov/offices/directorsOffice/Pages/ monthlyGeneralRevenueReport.aspx.
Information for this article was contributed by Alison Sider of the Arkansas Democrat-Gazette.
Front Section, Pages 1 on 04/04/2012