Arkansas' surplus projected to reach $1 billion by end of fiscal year
With tax revenue continuing to outpace projections, Arkansas is on track to have a $1 billion surplus by the end of the fiscal year, which ends in June.
During a meeting with reporters on Friday, Gov. Asa Hutchinson said it was great news to see the state’s revenue continuing to outpace projections. He said lawmakers will need to decide how they will use the funds.
“Whenever you look at options for this money, I will certainly work with the legislature and listen to them. We will all make a joint decision as to steps that need to be taken,” Hutchinson said.
The governor added that he would like to use the money to expand broadband internet service and construct new school facilities, which are seeing construction costs rise due to inflation. Since he is term-limited, he would need to hold a special session to tap into the funds.
John Shelnutt with the Department of Finance and Administration’s office of Economic Analysis and Tax Research said that his department, along with the Bureau of Legislative Research, both project there will be a surplus of $1 billion by June 30.
The most recent revenue report from March had projected the budget surplus would be at $600 million by the end of June, but revenue continues coming in above forecast. Schelnutt explained this fiscal year will finish with a surplus of $456 million, which is $192 million above the $264 million the department had projected.
In an interview with KUAR News, Shelnutt said part of the reason revenue keeps outpacing projections is the department forecasted conservatively due to federal stimulus money running out.
“Corporate revenue in Arkansas will be very high for a second year running. We don’t normally roll the dice and count on that, so it is doing very well compared to forecasts. Sales tax is doing well,” Shelnutt said.
According to the National Conference of State Legislatures, many states are reporting surpluses due to the federal government providing aid to state governments.
The state's revenue report, which will be released at the beginning of next month, will confirm whether these projections are accurate.
FEDERAL RENTAL ASSISTANCE
Arkansas has requested a 61% reduction in federal assistance for COVID-related rental assistance. Hutchinson told reporters he made the request in a letter to U.S Treasury Secretary Janet Yellen.
The governor said the state doesn’t need the full $146 million that has been allocated since the state’s economy is doing well.
“The economy has returned with jobs aplenty out there and we have existing programs in place for rental assistance that were pre-pandemic. We’re back to a stage where people are working to the same extent pre-pandemic,” Hutchinson said.
The state still has $6.7 million to assist low-income tenants from the Emergency Solutions Grant Program, which is handled by the US Department of Housing and Urban Development and the US Department of Health and Human Services, according to the governor's letter.
The COVID-related rental assistance the state has will be given as a grant to two nonprofits, Our House and Restore Hope, for a pilot program. The grants will be used by the nonprofits to hire caseworkers that will work with families on short-term rental assistance and job training.
“The goal is for parents to not just have a job today, but to get the skills and education needed to move into a career that can support their family not only now but into the future,” Hutchinson wrote in his letter.
According to the Arkansas Department of Human Services’ website, the state stopped accepting applications for rental assistance on April 1. Hutchinson said the state doesn’t plan on opening up the portal again.