Expecting $353M Revenue Shortfall, Governor Will Call Special Session

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The state expects to see a $353 million budget shortfall over the next three months, an economic result of the COVID-19 pandemic, Gov. Asa Hutchinson announced late Monday afternoon.

The state’s revenue forecast has been revised accordingly, and a special session of the Legislature will be called to address the budget issues, he said.

The governor also announced that the filing and payment deadline for state taxes for individual taxpayers has been extended to July 15, which mirrors an extension already announced for all federal taxpayers.

The deadlines will not change for state taxes for corporate taxpayers or for estimated payments.

However, the state will still have to balance its budget by June 30, Hutchinson said.

Layoffs and business slowdowns are expected to account for $160 million of the $353 million revenue shortfall, while the rest is expected as a result of the tax deadline extension.

The state does have an “unallocated surplus” of $173 million from last year that will help, Hutchinson said. 

“We will utilize the unallocated surplus to accomplish the broader mission of state government, even though it’s going to be a serious belt-tightening time for all of state budget except for those that are on the front line of the current crisis” such as the Arkansas Department of Health and the Arkansas Department of Emergency Management, he said.

Those funds will also be available for a quick response in case the state needs ventilators, and can be used to aid hospitals and buy personal protective equipment for health care workers.

In addition, Dr. Nathaniel Smith, Secretary of the Arkansas Department of Health, said there had only been nine new cases since Sunday, including just one at a nursing home. So the total as of Monday afternoon was 174.

He said that is the smallest increase in cases the state has seen in several days. Also, five individuals in the state have recovered from COVID-19.

Also on Monday, state officials directed barbershops, beauty salons, tattoo parlors, nail salons and massage businesses to temporarily cease operations.

You can watch video of the news conference:

Video:

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