DALLAS — Arkansas ended fiscal 2012 last week with record annual revenues and a $145.6 million surplus, its largest-ever ending balance.
Fiscal 2012 is the second year in a row that Arkansas tax collections exceeded expenditures. Fiscal 2011 ended with a surplus of $45 million.
General revenue collections totaled $4.75 billion in the year that ended June 30, with $510 million coming in during the last month of the fiscal year.
Revenues in fiscal 2012 were $179 million more than in fiscal 2011 and $51 million more than the most recently revised forecast.
Revenue growth was seen in the sales tax and the state income taxes, said John Shelnutt, chief economist for the Department of Finance and Administration.
The sales tax generated $2.1 billion in fiscal 2012, up almost 3% from fiscal 2011. Individual income tax collections in 2012 totaled $2.9 billion, with another $435.3 million coming in from the corporate income tax. Income tax refunds totaled almost $500 million.
Year-end payments and interest income could push the surplus available for appropriation by the 2013 Legislature to more than $200 million, said DFA director Richard Weiss.
It is too early to say the recession is over, Weiss said at a Tuesday news conference, despite the record collections for fiscal 2012 and in June. Net revenue in June totaled $510 million, breaking the record for monthly collections set in June 2011.
“We still have a lot of folks out of work in this country,” he said. “We still have a very shaky economic time.”
Gov. Mike Beebe said the surplus could help resolve a potential shortfall in Medicaid payments or go toward upgrading higher education facilities. One-time money should be dedicated to capital improvements, he said, but using some of the surplus to close the Medicaid gap also would be appropriate.
The state Department of Human Services has calculated that Arkansas may face a shortfall in the Medicaid program of as much as $400 million in fiscal 2014. Lawmakers earlier this year considered allocating $40 million to the health care program for low-income Arkansans.
Beebe said the healthy surplus is good news.
“The trend reflects several months of increased taxes in virtually every category,” he said. “It means people are working, people have jobs.”
Democrats in the General Assembly said the surplus would help in efforts to remove all or part of the remaining 1.5% sales tax on groceries.
The grocery tax was 6% when Beebe took office in 2007. The rate was cut to 3% in 2007, to 2% in 2009 and to the current 1.5% in 2011.
Republicans said they would like to use the surplus to reduce the income tax rate when the Legislature convenes in 2013.
Six tax cuts passed by the 2011 Legislature, including the grocery tax, are expected to cut fiscal 2013 revenues by $45 million.
June net revenues include $181 million from the sales tax, $254 million from the individual income tax and $82 million from the corporate income tax.