DALLAS — Arkansas tax collections are expected to be 3.5% higher in fiscal 2013 than in fiscal 2012, but Gov. Mike Beebe has told state agencies not to expect more money next year.
The official revenue forecast of $5.93 billion of general fund revenue in the fiscal year that begins July 1 was presented Thursday by Richard Weiss, director of the Department of Finance and Administration and Beebe's chief fiscal officer, to the Legislative Council's evaluation and expenditure review subcommittee.
Net revenue, which is after tax refunds and statutory allocations, should be $4.73 billion in fiscal 2013, Weiss said at the meeting in Little Rock. Total collections will exceed those of fiscal 2012 by $174.3 million, and net collections should rise by $161 million. Income and sales taxes are the major sources for the general fund.
Gross revenue projections for fiscal 2013 include $2.2 billion from the sales tax, an increase of $77.6 million from 2012. The individual income tax is expected to bring in $2.9 billion.
Beebe said schools will get a small increase in the 2013 balanced budget he is set to release Jan. 17, but most other agencies will not. The General Assembly will meet in February for a fiscal session.
"It's going to be a relatively flat budget," Beebe said at a news conference. He said he expects federal aid to states to be reduced next year.
Weiss said there is a chance the state's economy could slip back. "We feel the forecast we are presenting to you today will be a good, conservative forecast," he said. "There is a risk out there that we can return to the recessionary period that we've been in. We certainly don't see any reason to be any more optimistic."
Weiss said the latest fiscal 2013 projection is $121 million lower than before the 2011 session. He said $87.2 million was removed from the forecast due to revised expectations of a sluggish economy, along with tax policy changes.
In his presentation to the subcommittee, Weiss said the revised 2013 forecast is based on "a more realistic pattern of slow recovery for the next few years during a protracted period of consumer debt de-leveraging, reluctance to hire, and generally weaker growth prospects compared to previous cycles of recovery."
The state is currently operating with a $4.6 billion general fund budget. Collections in the first four months of fiscal 2012 are $9.9 million more than expected.
Weiss said the state ended fiscal 2011 with a $93 million surplus. Net collections in fiscal 2012 are expected to total $4.57 billion in fiscal 2012, he said, down $6.3 million from fiscal 2011.