Arkansas Gov. Asa Hutchinson's tax cuts will lower revenues in fiscal year 2016.

DALLAS - With a month and a half left in the fiscal year, Arkansas revenues are running $79.3 million or 2.1% above the previous forecast, according to an updated report from the state Department of Finance and Administration.

For fiscal year 2016 beginning July 1, net revenue estimates were lowered by $26.5 million to $5.19 billion, according to the May 8 report.

The forecast predicts a net revenue increase for the 2015 fiscal year ending June 30 of about $129 million, or 2.6% over fiscal year 2014 revenues.

The previous forecast, issued in November, predicted an increase of about $24.6 million, or 0.5% above fiscal 2014.

DFA Director Larry Walther also projected a decrease in net revenue from previous estimates for fiscal 2016 and fiscal 2017 because of tax cuts passed by the last two General Assemblies. Those cuts include about $100 million in middle class income tax cuts championed by Gov. Asa Hutchinson who took office in January.

DFA officials project net revenues of more than $5.15 billion by the end of June, which would "fully fund the budget."

Walther expects previous projections of about $92 million in surplus to grow because of a surge in tax collections in nearly every major category in April that put the state almost $164 million above its revenue forecast.

"We're analyzing those payments and the other factors to determine how that will impact the surplus at the end of this fiscal year and how it will impact future fiscal years, but we do not know the answer to that at this point," Walther said.

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