State general revenue collection in October continued its roller-coaster ride by dipping below forecast and below the amount collected in October of 2011 after being above in both categories the month before.
Collections were 2 percent, or $8.9 million, below forecast for the month, the state finance department said Friday.
Tim Leathers, deputy director of the Department of Finance and Administration, blamed a decrease in income-tax collections for the month. He said the decrease was anticipated after income taxes came in above forecast in September.
“We expected that to flip this month, which it has,” Leathers said. “We think that’ll flip back next month.”
Leathers said the forecast includes an estimate of when pay periods fall and the amount of the payroll.
“It’s hard to hit that moving target,” Leathers said. “Making it all hit exactly in which month is an intricate task.”
Individual income-tax collections in October totaled $218.1 million. That is $10.7 million or 4.7 percent below last year and $2.3 million, or 1.1 percent, below forecast.
Individual income taxes are made up of payroll withholdings, estimated payments and payments from income-tax returns and extensions.
Leathers said the collections have been within an acceptable range above and below forecast so far this fiscal year.
“We only get concerned when we get out of line and see a trend,” Leathers said. “What we see is just a fluctuation between months.”
Arkansas is 1.6 percent, or $28.8 million, above forecast so far in the first four months of the fiscal year that began July 1.
Matt DeCample, spokesman for Gov. Mike Beebe, said October collections weren’t a surprise or a reason to be worried.
“The big number of course is the end-of-year forecast and how you get there is rarely a straight line.
We’restill holding pretty well,” DeCample said. “Generally I think you’ll just continue to see these gentle slopes rather than peaks and valleys.”
General revenue comes mainly from income and sales taxes. It amounts to about 20 percent of the state’s $25 billion-a-year budget, which includes federal funds, special revenue such as the gasoline tax, cash funds such as college tuition and fees and other money.
In the first four months of the fiscal year, gross general revenue totaled $1.88 billion. That is $39.1 million or 2.1 percent above the total general revenue collected in the first four months of fiscal 2012, which started July 1, 2011.
Sales-tax collections were below forecast for the fourthstraight month of the fiscal year. In total, sales-tax collections are 4.6 percent below forecast.
At $705 million, sales-tax collection is 0.9 percent or $6.1 million below the first four months of fiscal 2012.
“The economy is just not taking off like we’d like it to,” Leathers said. “People are not confident in spending and businesses are just not reinvesting to the degree we would like.”
On Nov. 15, Beebe will present a general-revenue forecast and a proposed general-revenue state budget for fiscal 2014, which starts July 1, 2013.
The state has a surplus of $197 million from the past fiscal year.
The total gross general revenue collection in fiscal 2012 was $5.92 billion, whichis $250.8 million (or 4.4 percent) more than was collected in fiscal 2011.
The department has forecast that the state will raise $5.93 billion in gross general revenue in fiscal 2013.
The forecast for November is that the state will collect $417.3 million in gross general revenue.
In fiscal 2012, October gross general revenue was $412.7 million.
Department analyst Whitney McLaughlin said October’s $442.5 million gross general revenue was not a record for the month.
She said the record was set in October 2011, when the collection totaled $457.5 million.
McLaughlin said the state also collected $144.14 million in special revenue, which is dedicated to a particular purpose such as highway maintenance.
According to the department, October’s general revenue included:
Income-tax refunds were up $3.8 million (27.2 percent) over the same month last year to $17.8 million, above the state forecast by $3.4 million (23.6 percent).
A $1.1 million (0.6 percent) decrease in gross receipts (sales-and-use tax) over the same month last year to $171.3 million, missing the state’s forecast by $8.3 million (4.6 percent).
A $2.5 million (10.1 percent) decrease in corporate income tax over the same month last year to $22.3 million.
A $9 million (2.5 percent) decrease in net available revenue over October 2011 to $355.6 million, below the state forecast by $21.6 million (5.7 percent). The net available is the amount agencies are authorized to spend.
Northwest Arkansas, Pages 9 on 11/03/2012