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State tax officials said Thursday that Arkansas’ June net available general revenue was $589.7 million, down 9.6% from the same month last year and 16.1% above forecast.
The fiscal year ended Tuesday. Year-to-date net available general revenue was $5.75 billion, down 2.8% year-over-year and 6.9% above forecast.
All major categories of revenue collections in June were above forecast and up from the year before. The forecast had been revised on March 23 because of the COVID-19 pandemic. But it was revised again, on June 30, up by $240 million.
John Shelnutt, the state’s economic forecaster, told Arkansas Business the report was good for a variety of reasons.
“We assumed 2% growth for the year in the revised forecast, but with the final quarter pulling growth, that forecast assumed the final quarter pulling growth down because of COVID-19,” he said. “We actually got 3.2% growth for the year, with June providing that strong 8.8% growth surge. So the economy did better than expected, and taxpayer behavior was different than what we expected. All of those were positives for Fiscal Year 2020.”
Shelnutt said that in June, sales tax and individual income tax powered the gain above forecast. Sales tax collections came in at $227.4 million, $23.5 million above forecast and up 8.8% from the year before.
Shelnutt said retail sales and motor vehicle sales were notable, with motor vehicle sales up 25% year-over-year, and up 20% from June 2018. He said he thinks low interest rates and other special deals offered to customers drove the growth.
“It does say something about customer confidence,” Shelnutt said. People are buying big-ticket items, he said, but department store and restaurant sales are down from last year.
Shelnutt added that the first revised forecast came out before the federal stimulus package and enhanced unemployment benefits were approved. The enhanced employment benefits, along with fiscal and monetary stimulus from Washington, helped consumers stock up and step out with spending, he said.
On individual income tax collections, state officials had expected to see greater declines because of the deadline shifting from April 15 to July 15. But about 80% of taxpayers have filed over the past three months, he said.
Individual income tax payments were also higher than expected for Fiscal Year 2020 as a whole.
June’s individual income tax collections totaled $302.2 million, down 7.9% from last year but $32.8 million above forecast.