July Revenue Report
STATE JUMPS INTO NEW FISCAL YEAR WITH MORE TAX SURPLUS
The Arkansas Department of Finance and Administration (DFA) issued the July revenue collections report today for the first month of the new fiscal year. Even with new forecasts that have been revised increasing predicted collections, the trend above forecast continues. Collections were $26.2 Million or 5.2% above forecast.
DFA reported that revenue exceeded forecast in all major categories. Sales and Use Tax was over forecast by $12.1 which DFA attributed to strong consumer and business spending. Motor vehicle tax collections continued down as compared to last year when extraordinary demand was strong fueled by federal payments to consumers.
Individual Income Tax exceeded forecast by $1.2 Million. The net amount above forecast was also positively impacted by lower than expected Individual Income Tax refunds. Refunds were $9.9 Million below last year which was about a 45% decrease. Refunds were $8.2 Million below forecast increasing the total net surplus for the month. Refunds are based on previous year income and economic activity.
Corporate Income Tax was $2 Million above forecast and refunds were $1.4 Million below forecast. These categories combined added $3.4 Million to the surplus.
It is always good to begin the fiscal year on a positive note. It is especially good now on the eve of a special legislative session to reduce taxes. Future predictions by DFA for the next three years have substantial revenue growth built in to support future tax cuts and spending increases for categories such as teacher raises. Hopefully, the naysayers that are now predicting slower economy in the near future will prove to be wrong and the growth will continue. History shows us that the national economy can turn very quickly.
The July 2022 revenue report may be viewed and downloaded here.