Gov. Asa Hutchinson said Wednesday that state officials, because of the impact of the coronavirus pandemic, are considering extending the April 15 deadline for paying Arkansas individual income taxes.
The governor, at a news conference on where the illness has spread in Arkansas, said he's asked what extending the payment deadline would cost the state. If paid by April 15, the payments would be revenue in the current fiscal year, 2020, which ends June 30.
"The Internal Revenue Service distributed an update this afternoon authorizing taxpayers to make their 2019 [federal] tax payment normally due 4/15/20 as late as 7/15/20," the governor said later in a written statement. April 15 is the deadline for both state and federal income taxes.
"This late date would go beyond our fiscal year , and my Department of Finance has concerns about delaying [state income tax] payments more than 45 days. I have asked for a fiscal impact statement, and no final decision will be made until I receive the fiscal impact," Hutchinson said.
The Republican governor also declined to set a particular time frame for deciding on potential cuts to the state's general revenue budgets for the current fiscal year and for the next.
"We are looking at this every day," Hutchinson said.
Hutchinson said he's grateful that the state has a "rainy-day" fund and a surplus, "but that will be eaten up very, very quickly, if we don't take the right measures in terms of watching the state budget and making any adjustments that are needed."
Asked if he expected to make these decisions within the next month, the governor said, "Let's wait and see.
"Right now, we're on target and we're on budget, but I don't expect to be there next month," Hutchinson said.
"So, we're measuring it. We are going to make decisions. Our first obligation is to not only balance the budget, but also take what steps we can to support our hospitals, our health care workers that are out there, and those are the ways that we are spending our time right now," he said.
The general revenue budget for fiscal 2020 totals $5.75 billion, an increase of $124.1 million over last year's budget, with most of the increase targeted for human services and education programs. The Legislature and governor enacted the budget during last year's regular session.
State government's fiscal 2021 budget will be set in the Legislature's fiscal session that is scheduled to begin April 8.
Earlier this month, Hutchinson proposed an $88.9 million increase in the general revenue budget to $5.83 billion in fiscal 2021, with most of the increase for human services programs.
He also proposed setting aside $54 million of surplus revenue in fiscal 2021, with $40.5 million going into a restricted reserve fund, "to be used for future tax cuts or other budget needs," and $13.5 million toward matching federal highway funds.
In an interview, Department of Finance and Administration Secretary Larry Walther said he has recommended extending the state's individual income tax payment deadline of April 15 by 45 days. The state wouldn't charge taxpayers interest and penalties under this option.
The state's fiscal year ends June 30, and the federal government's fiscal year ends Sept. 30, Walther noted.
"If we were to push [the individual income payment deadline] to July, we would be in the next fiscal year , and all that money would be coming in next year and not this year. We still have to fund the state government in fiscal year , and then we're going to have to figure out what fiscal year  looks like," he said.
Walther said state officials "haven't seen any quantitative results of the virus yet in terms of revenue generation for the state.
"We expect to see it next month and that will then give us a window into the rest of this fiscal year, which will be three more months, and what is it going to do to the amount of revenue that we are going to be receiving, not only in income tax, but in sales tax," he said, referring to the state's two largest sources of general revenue.
Walther said he doesn't know whether this coronavirus epidemic will last three more weeks, six more weeks or three more months, and "only time will tell, so it makes it difficult to make the [revenue] forecast."
February was the eighth month of state fiscal 2020.
The finance department reported earlier this month that total general revenue so far in fiscal 2020 increased by $185.3 million over the same period in fiscal 2019 to $4.5 billion and exceeded the state's forecast by $89.2 million.
Tax refunds and some special government expenditures come off the top of total general revenue collections, leaving an amount that state agencies are allowed to spend.
During the first eight months of fiscal 2020, net general revenue increased by $171.4 million over the same period in fiscal 2020 to $3.9 billion. That's exceeded the forecast by $97.7 million.
Hutchinson said he talked with House Speaker Matthew Shepherd, R-El Dorado, and Senate President Pro Tempore Jim Hendren, R-Sulphur Springs, on Wednesday and he expects the Legislature to convene as scheduled on April 8.
"They will meet in session as the constitution requires, but based upon the circumstances there they will take whatever necessary precautions they need, if they need to do more remotely," the governor said. "But that is their decision to make. They are a separate legislative body, but they have assured me that they will be in session as the constitution requires.
"I'll continue to work with them and we can be flexible under these circumstances," Hutchinson said. "Their first priority is to make sure that we have the support that we need for our citizens during this time and, if it needs a budget passed, we're going to get it passed, and if we need special appropriations, they're going to get that done, so they'll work through actually the logistics of it."
Nate Smith, secretary of the Department of Health, said there is video technology that could potentially be used to minimize risk to state lawmakers.
"Again, this is a very dynamic situation, and we had a significant increase in the number of cases over the last 24 hours, and we'll just have to see how this plays out over the next days and weeks. But fortunately in 2020 we have a lot of options for meeting that weren't available in previous decades," he said.
In an interview, Shepherd said he is reviewing the possibility of "alternative arrangements" for a limited number of representatives who could be otherwise unable to participate in the fiscal session or couldn't be at the state Capitol.
In an interview, Hendren said he wants to comply with the Arkansas Constitution as well as guidelines by the U.S. Centers for Disease Control and Prevention that call for no more than 10 people to gather. He said the Senate could potentially conduct a lot of business through video technology, but its rules would have to be changed to allow for votes through text, a phone or videoconferencing.
A Section on 03/19/2020
Print Headline: State weighing deadline leeway on filing of taxes