Fri 09|03|10

Arkansas tax collections continue decline

Submitted by The City Wire staff on Tue, 01/05/2010 - 11:52am.

A declining tax revenue problem that caused Gov. Mike Beebe to cut the fiscal 2010 state budget by $100 million continues.

Arkansas tax collections between July and December are $2.577 billion, down 3% below the same period in 2008 and 1.9% below forecasts, according to a Tuesday (Jan. 2) report from the Arkansas Department of Finance and Administration. The state’s fiscal year runs from July to June.

“It’s clear from the numbers coming in that we’ve got both consumers and businesses tightening their belt in this early recovery, and government has to function the same way,” said Matt DeCample, spokesman for Gov. Beebe.

DeCample said Beebe and DF&A officials will review the numbers “during the next couple of weeks” to determine if further budget adjustments are necessary.

Gross receipts collections— primarily sales and use tax —  total $987.1 million fiscal year-to-date, down 9.2% below the 2008 period and 2.7% below forecasts.

“This decline relative to last year stems from a combination of weak consumer sales, business-to-business sales, weather effects, and a series of non-recurring refunds. noted the DF&A statement.
 
Year-to-date individual income taxes total $1.136 billion, down 4.8% below the 2008 period and 1.2% below forecasts. Year-to-date corporate income taxes total $227.4
million, up 16.7% from the 2008 period, but down 3.1% below forecasts.

During December, gross receipts collections totaled $159.7 million, down 10.5% compared to December 2008 and 8.3% below forecast.

All taxes collected in December totaled $429.3 million, down 6.2% from November 2008 and 6.6% below forecasts.

“Collections were down in all major categories by 6 to 10 percent compared to year ago December levels and by 5 to 8 percent compared to forecast,” according to the DF&A report.

The state collection tally is not as bad as the most recent Sebastian County sales tax figures.

For the first 11 months of 2009, the Fort Smith sales tax is down 8.59% compared to last year, and is down 5.96% from budget estimates. The actual revenue reduction for the street sales tax budget and for the sales and use tax bond budget is $1,098,800 each.

The city’s share of the county 1% sales tax ($1.219 million) decreased 22.74% compared to the receipts for the same period in 2008, and is down 18.93% from budget estimates. Year-to-date, the county sales tax is down 9.10% in collections, and is down 5.88% from budget estimates.