4.5.22 – Harrison, Ark. (KY3)
Arkansas Gov. Asa Hutchinson discussed the possibility of additional relief for taxpayers, on Monday, because of high gas prices and inflation as the state’s surplus for the fiscal year approached $500 million.
The Arkansas Department of Finance and Administration said the state’s net available revenue for the fiscal year, which began July 1, now totals more than $5 billion. That’s $456 million above forecast and more than $390 million above the same time last year.
“This is expected, and if the economy continues to grow at this pace, then we will need to consider alternatives to provide financial relief to the taxpayers who are struggling record high gas prices and inflation,” Gov. Hutchinson said in a tweet Monday.
The governor’s office has not yet elaborated on what proposals the governor is considering.
In December, Hutchinson signed into law the largest tax cut in the state’s history. The package, approved by the majority GOP Legislature, cuts taxes by nearly $500 million once fully implemented in 2026.
As the war in Ukraine continues, inflation has hit a 40-year high. U.S. President Joe Biden has gone into reserve to combat current gas prices, but economists say these numbers show those factors aren’t impacting the natural state the hardest.
”We’re just in a strong position. Arkansas is always in the unique position where the U.S. see these big downturns or slow downs, Arkansas just never experiences it quite as hard as other states,” explained Scott Hardin, spokesperson for the Arkansas Department of Finance and Administration.
In March, sales and income tax revenues across the state were higher than forecasted and even surpassed number from a year ago when most received stimulus checks. The state’s net revenue for March totaled $519 million, which was $146 million above the state’s revenue for March 2021 and $138 million above forecast.
”We know that right now, things look strong, people are spending money, they’re getting out,” said Hardin. “The sectors that struggled during COVID, the restaurant sectors, the tourism sectors, those are bouncing back.”
Economic boosts have even come from less unexpected places, like when the University of Arkansas Razorbacks mens’ basketball team recently made their March Madness run. Steve Jenkins of Hogman’s Gameday Superstore says he had seen the effect from February, as basketball merchandise sales continued to soar.
”People like to get out and spend money when the Razorbacks are winning, so it’s good for the state,” he said.
And while the Razorbacks basketball season has come to an end, forecasters say this month, surplus gains won’t be.
”April is always are busiest month for just overall collection, obviously that’s because the tax filing deadline,” said Hardin. “April is normally our largest month of collection, so we know this is going to be a big month.”
Hutchinson said the state’s budget surplus is on target to reach $600 million by the end of the fiscal year on June 30.
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