Arkansas Department of Finance and Administration officials told the Legislature’s Joint Committee on Economic and Tax Policy last week they expect a $94.8 million surplus when fiscal 2008 ends June 30 due to strong collections of corporate and individual income taxes.
Deputy director Tim Leathers said net general revenues this year should be $101.4 million over earlier expectations, for a total of $4.45 billion. That means the budget will be fully funded for the fiscal year, he said, allowing state agencies to spend another $6.6 million while still posting the surplus.
However, Leathers said projections for fiscal 2009 remain at $106.8 million below the level expected when the state’s two-year budget was adopted in 2007 due to a slowing of income and sales tax collections.
He said the finance department expects a mild recession in Arkansas, with a slowing economy in the first six months of fiscal 2009 before it improves slightly in the remainder of the year.