LITTLE ROCK — State government coffers overflowed with a surplus of nearly $300 million at the end of 2012-2013 fiscal year, the state fiscal office reported Tuesday.
Net available revenue for the fiscal year that ended Sunday totalled $5.02 billion, $275.4 million, or 5.8 percent, more than a year ago, according a report by the state Department of Finance and Administration.
The resulting year-end surplus was $299.5 million, or 6.3 percent, above the amount budgeted for fiscal year 2012-2013, which ended Sunday, the report said.
“The fiscal year ended above forecast and above the budgeted amount as a result of growth primarily in individual income tax collections,” the report said, adding that withholding income tax payments tied to payroll activity and economic conditions also exceeded conditions.
Gov. Mike Beebe called the report “potentially good news.”
He told reporters the report suggests that there may be “additional funding for such things as those scholarships that we had to do with one-time money this time — potentially.”
Because of a scholarship funding shortage, lawmakers this year approved spending $1.1 million in rainy-day funds to cover scholarships for Arkansas students attending college in other states to study in health fields not offered at Arkansas colleges.
Asked about possible uses for the surplus, Beebe said he had some ideas, but he said the flow of revenue would have to be monitored between now and the fiscal session that begins in February.
The governor said he did not believe the report was a sign that the state could have afforded more tax cuts than were approved in this year’s legislative session. The Legislature approved a package of tax cuts totaling about $10 million in fiscal year 2014, $85 million in fiscal 2015 and $140 million in fiscal 2016.
“It’s much easier to have some money put back for a rainy day than it is to be a liberal budget person and just want to project liberal projections and then wake up and find out, ‘Oh my gosh, I either spent too much money or I cut too much in the way of taxes and now we’re the hole like all these other states,’” Beebe said.
Net general revenues in June were $546.9 million, $37.3 million — 7.3 percent — above forecast. Individual income tax collections totaled $285.4 million in June, $31.6 million, or 12.5 percent, above last year and $23.8 million, or 9.1 percent, above forecast.
Beebe said the bump in individual income tax collections was “an anomaly” driven by Arkansans moving income to the 2012 calendar year in anticipation of federal tax increases, an anomaly that he said would have a negative impact on next year’s income tax collections.
“That has to be factored in. That doesn’t negate the fact that I’m happy” with the report, he said.
State Department of Finance and Administration Director Richard Weiss noted that “there could be some big refunds coming out of that, a lot of off-setting refunds. That’s just stuff that we naturally would be cautious about.”
The state’s sales tax collections were above last year, but below forecast, according to the report.
Sales tax collections in June totaled $183.9 million, up $5.6 million, or 3.1 percent, over last year, and $1.7 million, or 3.1 percent, below forecast.
Weiss said the disappointing sales tax collections reflect that “people are just not spending money.”
“I think people are still paying down debt. People are getting by, but you’ve got less money being spent by both businesses and individuals,” he said.
But Beebe said the report also suggests “people are working.”
Corporate income tax collections rose to $71.7 million, down $10.1 million, or 12.4 percent, from last year, and $11.1 million, or 13.5 percent, below forecast.