LITTLE ROCK — Arkansas ended the fiscal year with a budget surplus of nearly $79 million, state finance officials said Wednesday.
Net available revenue collections for the fiscal year that ended Monday totaled $5.02 billion***, which was $4.5 million, or 0.1 percent, below the previous fiscal year but $78.7 million above forecast, allowing all categories of the state budget to be fully funded and creating a surplus.
Helping the state stay on budget was the fact that state forecasters correctly anticipated a drop in individual income tax collections, according to the state Department of Finance and Administration.
Individual income tax collections totaled $3.11 million for the just-ended fiscal year, which was down $33.2 million, or 1.1 percent, from the previous year but $10 million, or just 0.3 percent, above forecast.
“We adequately anticipated the swing in individual income tax,” said John Shelnutt, head of DF&A’s Economic Analysis and Tax Research Division. “That’s coming down off a high in the previous year, fiscal year 2013, which produced a large surplus that year.”
Shelnutt said high-income people shifted income into the 2012 tax year as a tax strategy, resulting in higher-than-expected individual income tax collections in fiscal 2013 that contributed to a surplus of nearly $300 million that year.
“We anticipated the wind-down of that taxpayer strategy that created that wave,” Shelnutt said, adding, “We probably overdid it on estimating individual income tax refunds as part of that provisioning.”
Individual tax refunds for fiscal 2014 totaled $509 million, which was up $14.2 million, or 2.9 percent, from the previous fiscal year but $32.4 million, or 6 percent, below forecast.
“That was a $32 million contribution to the bottom line by overestimating that payout from general revenue that did not happen to that extent,” Shelnutt said.
Sales tax collections for fiscal 2014 totaled $2.17 million, which was up $48.6 million, or 2.3 percent, from the previous year but $34.6 million, or 6 percent, below forecast.
Corporate income tax collections totaled $440.2 million for the year, which was above collections from the previous year by $9.1 million, or 2.1 percent, and above forecast by $11.2 million, or 2.6 percent.
Corporate income tax refunds for the year totaled $69 million, which was up $13.4 million, or 24 percent, from the previous fiscal year and $7.4 million above forecast.
***This article has been corrected from its original version, which said “million” when it should have said “billion.”