State revenue in July tops forecast, ’07 take
Posted on Tuesday, August 5, 2008
URL: http://www.nwanews.com/adg/News/233393/
State general revenue in July advanced $ 11. 2 million over July 2007 to $ 422. 6 million, eclipsing the state’s forecast by $ 16. 8 million.
The collections were buttressed by a $ 13. 7 million deposit in unclaimed proceeds from the state auditor’s office, the state Department of Finance and Administration said Monday in its monthly revenue report.
“When you wash that out, we are very close to being right on forecast,” said department Director Richard Weiss.
July was the first month of the state’s fiscal 2009. The new numbers mean the state begins the fiscal year on a good revenue total, though not all the revenue subgroups were impressive.
Gross receipts, including sales and use taxes, increased a bit over July last year, primarily because of higher residential utility sales and increased sales tax collections on them, he said.
Individual income taxes lagged a tad behind the month last year because of a “a timing issue” regarding when employers remit tax payments, Weiss said.
“We are still struggling along or going along reasonably well compared to most of the nation,” he said.
The National Conference of State Legislatures said last month that a growing budget surplus and a healthy natural gas industry have helped Arkansas buck a trend of souring state budgets.
The conference said 20 states had to tackle shortfalls in the year that ended June 30, while Arkansas recorded a $ 176. 5 million surplus. Arkansas also has $ 83 million left from fiscal 2007 and interest collected on the investment of idle state money.
The general revenue collections of $ 422. 6 million in July were a 2. 7 percent increase over July 2007 and 4. 1 percent over the forecast, the department said.
July’s collections are a record for the month, exceeding last year’s record $ 411. 4 million
The $ 13. 7 million in unclaimed proceeds was the first such deposit into general revenue in the past four years, ac- cording to figures provided by Weiss. The deposits totaled $ 15 million in fiscal 2002; $ 6 million in fiscal 2003 and $ 14 million in fiscal 2004.
The auditor’s office attempts to hold reserves adequate to pay claims for unclaimed property for a three-year period and this is the first recent year that funds in excess of such an amount were accumulated for transfer under state law, said Larry Crane, chief deputy in the state auditor’s office.
July’s general revenue also included:
Gross receipts, including sales and use taxes, of $ 188. 7 million. That’s an increase of $ 9. 5 million (5. 3 percent ) above the same month last year and $ 7 million (3. 9 percent ) above forecast.
Individual income taxes of $ 179. 2 million. That is a decline of $ 2. 9 million (1. 6 percent ) compared with the same month last year and is $ 1. 7 million (0. 9 percent ) below forecast. Individual withholdings declined by 2. 1 percent from $ 171. 7 million in July 2007 to $ 168. 2 million last month.
Corporate income taxes of $ 15. 4 million. That is a decrease of $ 13. 5 million (46. 7 percent ) from the same month last year and is $ 5. 4 million (26. 1 percent ) below forecast. Weiss said corporate income collections have been trending downward and he expects that to continue because of the continuing lag in the nation’s economy.
As general revenue comes in, the state makes about a dozen deductions that reduce the gross collections to a net revenue figure that agencies may be authorized by the chief fiscal officer to spend.
July’s net was $ 371. 2 million, which was $ 19. 6 million (5. 6 percent ) above July last year. That’s $ 20. 9 million (6 percent ) above the forecast.
In May, the Finance and Administration Department revised its forecast for the current fiscal year, trimming it by $ 106. 8 million and lowering the general revenue budget to $ 4. 411 billion for the year. That’s still an increase over general revenue spending in fiscal 2008, during which the state distributed $ 4. 353 billion to be spent by state agencies.
Gov. Mike Beebe has said state officials would consider revising the forecast upward, allowing agencies to spend more, if the state’s tax collections continue to outpace the forecast for several months.