Gross general fund revenues for Arkansas in December came in at $427.4 million, $3.8 million behind forecasts, but $6.1 million higher than collections in December 2005.
The under-forecast marked the first time since February 2004 that the state had not exceeded revenue predictions.
Although sales tax and personal income tax collections were above those for the same period in 2005, the state saw a decrease in the amount of corporate income tax collections. Net collections, however, were $385.9 million — an increase of $5.1 million over December 2005 and $8 million more than the forecast.
The state considers net collections to be the amount of money available after a number of mandatory expenditures are subtracted from the gross revenue — including debt service, tax refunds, public school appropriations, and legal settlements.
Lawmakers, who convened yesterday for the biennial regular legislative session, will have a surplus from the last two budget years of approximately $843 million to spend.
According to the National Conference of State Legislatures, many states are experiencing slowdowns in revenue growth. However, unlike Arkansas, most are feeling the pinch in sales tax collections.
“Although overall revenue performance has been stronger than expected, many states are starting to see individual tax categories performing below expectations,” the group said in a recent report.
