Gov. Asa Hutchinson’s administration on Thursday cut its forecast for net general revenue available to state agencies in the next fiscal year by nearly $206 million to $5.68 billion.
The state Department of Finance and Administration reduced its forecast for total general revenue collections in fiscal year 2021 by nearly $370 million to $6.89 billion. Last week, the finance budget cut the state's general revenue budget by nearly $353 million to $5.38 billion in fiscal year 2020 as it trimmed its forecast for total general revenues from $7.05 billion to $6.69 billion.
"The revision [to the fiscal year 2021 forecast] is necessary because of economic recession predicted as a result of impact from business slowdown and negative labor market effects from much of [fiscal year] 2021,” department secretary Larry Walther said in a letter dated Thursday to the co-chairs of the Legislative Council.
“These extraordinary impacts are not in the prior forecast used in budget recommendations for the fiscal session,” he wrote. “The governor’s announced shifting of tax filing and payment deadlines to early fiscal year 2021 partly offset the effects of economic recession.”
On March 4, Hutchinson proposed a general revenue budget of $5.83 billion for state government in fiscal year 2021.
In the fiscal session slated to start on Wednesday, the Legislature and Hutchinson will determine their priorities among state agencies for general revenue funding.