The Department of Finance and Administration says Arkansas was $13.1 million below projections for January, but the state's revenue is still up for the fiscal year. According to the DFA, the year-to-date net available general revenue is $3.4 billion, which is 4.1 percent higher than this time last year.
John Shelnutt, an economist with the department, said a drop in January revenue was forecasted, but not to this degree.
"The effect of the Federal Tax Cuts and Jobs Act, which shifted estimated payments by high-income individuals into December 2017, ahead of that tax policy change. And now we’re seeing the downside of that,” said Shelnutt.
The bill, which was signed into law by President Trump in late 2017, altered tax strategies significantly in 2018, and have made predictions for this year even more challenging. Shelnutt said declines in the stock market at the end of last year were also a likely factor in the decline of January revenue. The state's sales tax revenue for January fell $10 million short of forecasted totals.
While most revenue categories fell short of predictions, there were areas in which the state made unexpected gains.
"We did expect a decline in corporate income tax payments, and that was the one positive in the report; it did outperform with a sizable gain adding $9.5 million to the forecast. The results offsetting some of the losses in other categories," Shelnutt said.
State lawmakers are expected to begin consideration of a new tax plan from Governor Asa Hutchinson when the legislative session begins on Monday, the 14th.