State government’s general revenue tax collections in November increased by $53.7 million or 10.1% over the same month a year ago to $587.2 million and exceeded the state’s revised Oct. 19 forecast by $53.6 million or 10.1%.
The state’s two largest sources of state general revenue — individual income and sales and use taxes — both exceeded expectations for the month, the state Department of Finance and Administration said Thursday in its monthly revenue report.
Tax refunds and some special government expenditures are taken off the top of total general revenue collection, leaving a net amount that state agencies are allowed to spend.
The net in November increased by $36 million or 7.8% over a year ago to $500 million and exceeded the state’s forecast by $57.2 million or 12.9%.
November is the fifth month of fiscal 2022, which started July 1.
During the first five months of fiscal 2022, the net has increased by $79.5 million or 3% over the same period in fiscal 2021 to $2.77 billion, and exceeded the state’s revised Oct. 19 forecast by $73 million or 2.7%.
A state official said the state’s net tax collections so far in fiscal 2022 are on pace to exceed the state's projected surplus for fiscal 2022.
Earlier this year, the General Assembly enacted a fiscal 2022 general revenue budget totaling $5.849 billion, including a $17.1 million allocation to the restricted reserve fund.
On Oct. 19, the finance department increased its projection for net general revenue by $246.2 million to $6.11 billion in the current fiscal year, projecting a year-end surplus of $263 million above the fully-funded Revenue Stabilization Act that prioritizes the distribution of general revenue to state-supported programs.
The department on Oct. 19 also boosted its forecast for fiscal 2023 net general revenue by $298.5 million to $6.4 billion. Gov. Asa Hutchinson has proposed a general revenue budget for fiscal 2023 of $6.01 billion, with $54.9 million more transferred to the long-term reserve fund, according to the fiancee department.
In a special session, starting Tuesday, the General Legislature will consider an income tax cut measure that would cut the state’s top individual income tax and corporate income tax rates, combine the state’s low and middle-income tax tables, create a low-income tax credit and adjust the standard deduction for inflation. The bill reflects an agreement between the governor and Republican legislative leaders. Hutchinson said Tuesday that legislative leaders have confirmed to him that a majority of each chamber support the bill.
The finance department has projected the proposal would reduce state general revenue by $135.2 million in fiscal 2022 and increase each fiscal year until reducing state general revenue by $497.9 million in fiscal 2026.