Shrinking Shortfall Seen

Richard Wilson, assistant director of the Bureau of Legislative Research, told the Arkansas General Assembly’s Joint Budget Committee that revenue will be down about $51 million in fiscal 2010, less than half the reduction expected by Gov. Mike Beebe’s administration.

Beebe issued a budget report last week that said state revenue would be down $103 million in fiscal year 2010, which begins July 1, with no surplus remaining from fiscal 2009.

Wilson said he expects a $72 million surplus when the current fiscal year ends.

Richard Weiss, director of the Department of Finance and Administration, said revenue is currently about $80 million above projections. He predicted that income tax refunds that go out in April would reduce or eliminate any potential surplus.

Weiss gave the governor three revenue forecasts for fiscal 2010, including a high of $4.48 billion and a low of $4.41 billion. Beebe opted for the middle one, which totaled $4.44 billion.

In his report, Weiss lowered the revenue predictions from a hike in the state’s cigarette tax due to a reduction in sales expected from an increase in the federal cigarette tax. The finance department had said the tax would generate $86 million a year, but that figure was lowered to $71 million.

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