Arkansas general revenue collections in October increased by $69.5 million or 12.3% over the same month a year ago to $634.9 million, the state Department of Finance and Administration reported Tuesday morning.
The month’s collections exceeded by $17.6 million or 2.8% the state’s forecast, which was increased last month for fiscal 2021 that ends June 30. Increases in general revenues from collections were broad-based, the Finance Department said.
October’s individual income tax collections exceeded the state’s forecast by $10.4 million or 3.5%, while sales and use tax collections beat the state’s forecast by $2.4 million or 1%.
Tax refunds and some special government expenditures are taken off the top of the total collection, leaving a net amount that state agencies are allowed to spend.
The net in October increased by $62.9 million or 12.9% over year ago figures to $548.8 million and exceeded the state’s forecast by $15.8 million or 3%. October is the fourth month of fiscal 2021.
Last month, the Department of Finance and Administration increased its forecast for net general revenue in fiscal 2022 by $246.2 million to $6.11 billion, projecting a surplus of $263.2 million above the fully-funded Revenue Stabilization Act, and asp increased its forecast for net general revenue in fiscal 2023 by $298.5 million to $6.45 billion.
Gov. Asa Hutchinson said "The revenue projected for this fiscal year was revised last month to reflect increased growth in revenue because of the current strength of the economy in the state.
"It is great news that October revenue even exceeded the revised forecast,” he said. "The national economic outlook remains uncertain and for this reason we continue to budget cautiously with 20% of our annual revenues now in a long-term reserve account.”
Earlier this year, the General Assembly and Hutchinson enacted a Revenue Stabilization Act for fiscal 2022 totaling $5.849 billion, including a $17.1 million allocation to a restricted reserve account. The Revenue Stabilization prioritizes the distribution of state general revenues to state-supported programs such as the public schools, colleges and universities and human service programs.
Hutchinson hasn’t yet set a date for a special session to consider income tax cuts, but won’t call a special session before Nov. 29, Hutchinson spokeswoman Shealyn Sowers said last week. Legislative leaders said they have agreed with the governor on proposed income tax cuts that are projected to reduce state general revenues by roughly $500 million a year, after they are fully implemented within several years.
Last month, Hutchinson and some lawmakers said they believe that Arkansas can afford to cut individual income taxes by more than $300 million over the next two years without negatively affecting critical state services in light of the new revenue projections.
This story has been updated. It was originally published at 9:58 a.m.