LITTLE ROCK — Arkansas tax collections were 10.5 percent above forecast in February and 8.1 percent above collections a year ago, the state's chief fiscal officer said Monday.
LITTLE ROCK — Arkansas tax collections were 10.5 percent above forecast in February and 8.1 percent above collections a year ago, the state’s chief fiscal officer said Monday.
Richard Weiss, director of the state Department of Finance and Administration, said the increase was driven by people continuing to wait to file their individual income taxes.
“People are just, last month there were hardly any refunds filed, and it’s still just lagging way behind,” he said. “We just haven’t had as many file as we were expecting … But, I can promise you that is going to happen before the end of the fiscal year, we just don’t know when.”
The January rise in individual income tax collections — 10.1 percent compared January 2012 — was attributed to income shifting into the 2012 tax year to avoid federal income tax law changes. Weiss said he didn’t know the exact cause of the rise in February but suggested it might be “from all the tax preparers out there and everything got into a logjam and so we haven’t had the filings we expected.”
The monthly report also said sales tax collections were up 5.2 percent compared to last year and 0.9 percent above the monthly forecast. It’s the first time in eight months that sales tax collections have met or exceeded the forecast.
“Whether a lot of that is car sales, some business expenditures, what have you,” he said, “it’s not enough to make a big deal about, but it’s very gratifying and I hope it stays that way.”
Gov. Mike Beebe said the revenue report shows the forecast is “on target” but expressed concern that it’s been eight months since the sales tax collections were above forecast.
“It’s nice to see that one month it met or exceeded forecast, but over the long haul it’s still down, and yes, it’s a concern,” he said. “It’s on forecast. Now, net’s up because refunds are down.” “That’s a timing thing.” Beebe continued. “You know the feds didn’t do what they were supposed to do on time so people couldn’t file their tax returns, so we saw in January that refunds were down and that’s continued in February. If you look at gross, it’s right on forecast. Don’t get too excited.”
Beebe went on to say that potentially the lower-than-expected sales tax collections in the past eight months could be a problem when cobbling together the proposed budget for the 2013 fiscal year, which begins July 1.
“Potentially, it’s down, what, $8 or $10 million dollars, I guess, compared to forecast. Income tax is making up for it because people are working, but it’s something worth watching, yeah,” he said in response to a reporter question. “It’s another reason to be conservative.”
Last week, Speaker Davy Carter, R-Cabot, suggested House members consider up to $150 million in tax cuts. Beebe said that would be difficult for the state to afford unless programs are cut.
“The bulk of any increases in my proposed budget are in two areas,” the governor said. “They’re in educational adequacy, which you have to do, and in Medicaid, which still runs — even with the addition — still runs about a $60 million shortfall. So I don’t know where he’d get it from
without actually affecting some of these folks.”
Carter has said that even with the the tax cuts, no agency will receive less money than it received in the current fiscal year.
February collections totaled $210.1 million, $20 million above last year and $15.7 million above forecast, according to the revenue report.
Reporter John Lyon contributed to this report.