Modest Growth Forecast

The Arkansas Department of Finance and Administration expects state revenue to grow by 2%, or almost $90 million, in fiscal 2011 and by 3.1% in fiscal 2012.

Department director Richard Weiss said in a letter last week to the Legislative Council that net general fund revenue in the fiscal year that begins July 1 is expected to total $4.5 billion, including increases in income and sales taxes.

“The Arkansas economy continues to outperform the national average and a majority of states,” Weiss said in the letter.

The forecast includes a 4.2 % increase in individual income tax collections and a 4.5% increase in sales tax collections. Arkansas’ general fund budget for fiscal 2010 is $4.4 billion.

The General Assembly will convene its first annual budget session on Feb. 8. A constitutional amendment passed by voters in 2008 requires annual legislative sessions, with the even-year legislatures limited to budget issues.

Weiss said November’s general fund revenue of $480.7 million was $79.5 million higher than in November 2008 due to a $77.2 million increase in corporate income tax collections attributed to state tax audits. The total was $4 million less than expected.

Arkansas’ gross general revenue in the first five months of fiscal 2010 totaled $2.1 billion, down $51.6 million from the same period in fiscal 2009 and $19.4 million less than expected in the latest revenue forecast.

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