A Rosy Revenue Outlook

Arkansas revenue in fiscal 2011 will meet earlier expectations, with 2012 revenue providing a small surplus at the end of the fiscal year, finance director Richard Weiss told top lawmakers last week.

Weiss, the director of the Department of Finance and Administration, said state revenues in fiscal 2011 will total $4.48 billion, an increase of $155.8 million from 2010 collections.

He said revenue would be sufficient to fund low-priority projects as well as the high-priority efforts in the current budget plan. Collections in the first nine months of fiscal 2011 are $50.7 million above expectations for a 3.2% increase, according to Weiss.

“Arkansas continues to rank ahead of the national average and a majority of states in measures of growth in private sector employment, total wage income, housing sector indicators and with lower unemployment rates,” he said.

Fiscal 2012 revenues are estimated at $4.57 billion, Weiss said.

Total collections will be lowered by $25.4 million as a result of the recent 0.5% reduction in the state tax on groceries and other tax cuts approved by the 2011 Legislature. The state should end fiscal 2012 with a $2.5 million surplus, Weiss said.

The department’s revenue forecast for a 3.6% increase in fiscal 2012 and a 2% rise in fiscal 2013 is conservative, but rising energy prices could damage the recovery and reduce collections.

“Even though Arkansas has been performing better than most states, our economy is ultimately tied to the progress through these difficult issues at the national level,” Weiss said.

“We have provided a conservative budget forecast recognizing these uncertainties and their implications for growth,” he added.

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