LITTLE ROCK — Arkansas’ fiscal office Wednesday increased state revenue projections for this fiscal year and next, reflecting both modest economic growth and tax changes that go into effect for the budget period that begins July 1.
The state Department of Finance and Administration report to the Legislature revised the current revenue forecast upward by about $38 million, increasing the projected state surplus from about $99 million to $137.7 million by the end of the fiscal year on June 30.
The agency attributed the revision to a continued modest rebound in the economy but with better-than-expected income tax receipts.
"Withholding is stronger than we thought this year," said DF&A Deputy Director Tim Leathers. "It’s more people working, working more hours or some combination of both."
Overall, the fiscal office projected net available revenues to reach $4.8 billion this fiscal year, an increase of $113.6 million, or 2.4 percent, from fiscal 2012.
For the budget year that begins July 1, DF&A’s revised forecast projects net available revenues will reach $4.95 billion, an increase of $92.4 million, or 1.9 percent, above the current fiscal year. The amount reflects updates to the economic forecast and a net revenue reduction of $10.2 million from tax cuts enacted during this year’s regular legislative session.
The forecast amount is expected to fully fund the $4.9 billion fiscal 2014 budget enacted by the Legislature, along with an $18.9 million Rainy Day Fund set aside plus a $13.8 million surplus.