TAX NEWS - JUNE 2010

Arkansas Tax: Finance office: Arkansas revenues rose in May

02 June 2010 -- Arkansas' revenues were above forecast and above last year's figures, state finance officials said Wednesday, news that offered hope after months of sluggish tax collections and millions cut from the state's budget forecast.

The Arkansas Department of Finance and Administration reported Wednesday that net available revenues totaled $311.4 million in May. That's $18.4 million above last year's figures and $38.3 million above the forecast.

"It is a mildly optimistic month for us," said Richard Weiss, the department's director. "It's certainly been better than what we've been looking at for the last many months."

Department officials say a combination of one-time effects, including a shift in individual income tax withholding and lower-than-expected income tax refunds, contributed to the rise.

The state also saw a rise in its tax collections during the month. Individual income tax collections totaled $196.5 million, which was $22.7 million higher than last year and $21.3 million above forecast. Sales tax collections totaled $164.3 million, which is $500,000 above last year and $5.4 million above forecast.

In May, finance officials cut the state's budget forecast by $41 million because of a sharp decrease in tax collections. A total of $247 million has been cut from the forecast since the fiscal year began July 1.

A spokesman for Beebe's office said the governor was cautiously optimistic about the latest revenue numbers, but said he didn't want to read too much into one month's worth of figures.

Weiss said he did not expect to make further adjustments to the state's revenue forecast before the end of the fiscal year later this month.

"I think things have slowly turned where things are getting better," Weiss said. "It's going to be in fits and starts."