LITTLE ROCK (AP) — Arkansas’ revenue in May was less than last year but under a new forecast adopted last month money available for the state to spend is 1.2 percent above expectations, the state Department of Finance and Administration said.
After months of revenue falling short of expectations, Arkansas last month revised its budget forecast downward.
On Friday, the Department of Finance and Administration said it was largely hitting the new targets.
Individual income tax refunds were 7.1 percent below the amount forecast, while income tax money collected through the withholding tax was up — both benefiting the state.
The report said individual income tax collections for the month of May totaled about $209 million. Withholding tax decreased 3 percent compared to last year as a result of payroll timing differences, according to the department.
Tobacco tax revenues, gambling revenues and sales and use tax collections were also up. The department said the sales and use tax was up because last year’s revenue figures accounted for refunds issued as part of a court settlement.
According to the report, money available to the state from the month of May totals about $339 million, or about 20.5 percent above the expectations.
The report also noted that the year-to-date collections of the soft drink tax totaled about $43 million, which is an increase of 2.2 percent from last year.
Gov. Asa Hutchinson said he was pleased with revenue report, but the state will remain cautious when it comes to spending.
Hutchinson announced in April a $70 million budget cut to offset a revenue shortfall for the fiscal year that ends in June.
“Notwithstanding the good numbers for May, it was the right decision to revise the forecast and curtail Category B spending last month. The belt tightening was appropriate,” Hutchinson said Friday.
Hutchinson said agencies will see cuts in funding for programs and projects not deemed essential or necessary. Hutchinson said the agencies also would be able to absorb the cuts because of savings generated in the past year.
The governor said there would be no disruptions in services and no reductions in jobs.
The department said state agencies will see cuts in funding for programs and projects not deemed essential or necessary.