Beebe cuts state budget by $100 million (Updated)

Gov. Mike Beebe has cut the state budget by $100 million for the current fiscal year, citing a decline state revenue collections.

The move was made following a recommendation by the Arkansas Department of Finance and Administration, according to a statement from Beebe’s office.

“Just like any family or business, state government must live within its means," Beebe said in the statement. "Despite our conservative budgeting, it appears that our recovery from the recession has been slower than anticipated. There are still positive signs in the revenue numbers, and we maintain hope that the recovery will accelerate."

Total tax collections for Arkansas for the first three months of fiscal 2010 (July-September) are $1.274 billion, down 7.2% from the same period of 2008 and 6.4% off the revenue forecast, according to an Oct. 2 release by the ADF&A.

September gross receipts collections were $162.7 million, down $20.8 million, or 11.3% from the 2008 period. The collections were also 12.5% below forecasts. The sales and use tax is a commonly accepted indicator of consumer spending (consumer confidence).

The revised cut means a 2.2% reduction of the overall budget, with the Departments of Correction, Community Correction and Health and the Arkansas State Police seeing the largest reductions, noted the Beebe statement. Existing fund balances will ensure continued adequacy for public education.

Updated info: The new funding level — aka, net available revenue — for fiscal year 2010 (July 2009-June 2010) is $4.408 billion. Total gross collections are estimated to reach $5.52 billion, down 0.7% from fiscal year 2009 collections.