LITTLE ROCK, Ark. (AP) — Arkansas has ended its fiscal year with a $698.4 million surplus, state finance officials announced Tuesday.
The Arkansas Department of Finance and Administration said the state’s net available revenue for the fiscal year that ended on Sunday totaled $6.9 billion. The state’s individual income-tax collections came in below the previous year’s numbers and above forecast, while corporate income-tax collections were below last year and below forecast.
Sales-tax collections came in above last year’s numbers but below forecast.
Arkansas has reported its four highest surpluses over the past four years. The state last year reported a $1.1 billion surplus, its second highest ever, and its highest surplus, $1.6 billion, in 2022.
The surplus figures come weeks after Gov. Sarah Huckabee Sanders signed legislation cutting income and property taxes in a special session. The cuts are the third time the Republican governor has signed income-tax cuts into law since taking office last year.
Republican lawmakers have cited the state’s surpluses in the push for further tax cuts in recent years, while advocacy groups and Democrats have urged the Legislature to put money toward other needs.
Under the latest tax-cut measure, $290 million of the state’s surplus will be set aside for the state’s reserves in case of an economic downturn. Department of Finance and Administration Secretary Jim Hudson said that will bring the state’s reserves to nearly $3 billion.
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Arkansas concluded its fiscal year with a significant surplus of $698.4 million, state finance officials revealed on Tuesday. The Arkansas Department of Finance and Administration disclosed that the state had total net available revenue of $6.9 billion for the fiscal year that ended on Sunday. Although individual income-tax collections were down compared to the previous year, they exceeded predictions, whereas corporate income-tax collections fell short compared to both last year and forecasts. Additionally, sales-tax collections were higher than last year but lower than anticipated.
Over the past four years, Arkansas has reported its four highest surpluses. Last year delivered a surplus of $1.1 billion, the second highest on record, following the highest surplus ever of $1.6 billion in 2022.
The surplus announcement follows Gov. Sarah Huckabee Sanders signing legislation for income and property tax reductions during a special session. This marks the third time the Republican governor has implemented income-tax reductions since assuming office last year. Republican legislators have pointed to the state’s surpluses to advocate for further tax cuts in recent years, while advocacy groups and Democrats have urged the Legislature to allocate funds to other pressing needs.
As part of the most recent tax-cut legislation, $290 million of the surplus will be allocated towards the state’s reserves to cushion against economic downturns. Department of Finance and Administration Secretary Jim Hudson mentioned that this will bolster the state’s reserves to nearly $3 billion.