VOL. 129 | NO. 87 | Monday, May 5, 2014
April Revenues for Arkansas Take Expected Dip
LITTLE ROCK, Ark. (AP) – Arkansas state income tax revenues declined $101.7 million in April, but the Department of Finance and Administration said Friday the dip was expected and the state is on track to meet its forecast for the fiscal year
Gross general revenues for the fiscal year were $5.2 billion, up 1 percent from last fiscal year. Gross general revenues for the year are above forecast by $44.5 million, or 0.9 percent.
John Shelnutt, administrator for economic analysis and tax research for the DF&A, said the state economy is recovering and that's expected to continue. But in the 2015 fiscal year that starts July 1, revenues will be affected by state income tax cuts that are to go into effect.
"So our (tax revenue) growth rates are really not indicative directly of the economy, but the economy will be part of the story, obviously," Shelnutt said.
There was a one-time boost in individual income tax collections a year ago when some taxpayers shifted income reporting to avoid a federal income tax increase.
"This is mainly high-income taxpayers that had the ability to shift income into tax year 2012 to avoid the higher federal rates in tax year 2013," Shelnutt said.
That included having bonuses or the sale of businesses booked in tax year 2012, he said.
"We anticipated that as a one-time impact, with a return to normal levels," Shelnutt said.
A decline in April in individual income tax revenues of 5 percent helped offset the reduction in April 2014 collections, adding to net available revenue
Net available revenues for the year total $4.17 billion, up $22.2 million, or a half-percent from a year ago. Net available revenues are $77.6 million above forecast, or 1.9 percent.
"That is probably not going to hold up, that full amount over the next two months. We expect corporate income tax to pull that down some" in May and June, Shelnutt said.
Shelnutt said the state should still be above forecast come June 30, the end of the 2014 fiscal year, and able to fully fund the budget.
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