Arkansas ended its fiscal year last week with a surplus of $176.5 million, or about $81.7 million higher than the state Department of Finance and Administration predicted in early May.
The total general fund surplus is $259.5 million, including the surplus from fiscal 2008 and $83 million of funds left from fiscal 2007, according to the DFA.
When lower revenues were predicted this spring, Gov. Mike Beebe ordered state agencies to trim a total of $107 million from their fiscal 2009 budgets. If tax revenues continue to come in at the higher rate, Beebe said, those cuts may not be needed.
“If we continue to hold steady in the next two to three months, we will consider revising our economic forecast upward and restoring at least some of the funding that our state agencies have been asked to do without in the new fiscal year,” Beebe said in announcing the fiscal 2008 surplus. “Because our national economy still faces daunting challenges, I remain alert to the potential for additional downturns in the coming months.”
Total general revenue in June was $544.4 million, up $22.1 million from June 2007. Revenues in the last month of fiscal 2008 exceeded the official forecast by $42.8 million.
The biggest individual increase came with individual income tax collections, which were up $29.6 million over June 2007. Individual income tax collections totaled $262.4 million in June, beating the DFA’s forecast by $43 million, or almost 20%.
The higher-than-expected individual income tax collections account for $54.6 million of the overall surplus.
The DFA revised its forecast for fiscal 2009 in May, lowering its prediction for general fund tax collections to $4.41 billion, down $106.8 million from earlier estimates. Arkansas’ general fund budget in fiscal 2008 was $4.35 billion.
Beebe said the state is in good fiscal shape despite weaknesses in the national economy.
“Even though Arkansans are struggling with skyrocketing fuel prices and other increasing expenses, our state’s economy continues to show signs of strength in spite of the national downward trend,” he said. “Our conservative budgeting and careful planning have put Arkansas in an advantageous economic position compared to many other states.”