Arkansas revenue continued to show a surplus in December, as the state’s net revenue totaled $547.6 million, which is $6 million more than the same time last year.
According to the revenue report released Friday by the state Department of Finance and Administration, that number is also 1% above forecast.
Dr. Michael Pakko, the state economic forecaster at the Arkansas Economic Development Institute, says the continued rising numbers this fiscal year are the signs of a strong state economy.
“Cumulative numbers to date give us some indication of the state’s financial situation is for this fiscal year and that’s looking strong as well. Year to date net available revenues are $93 million over forecast, about 3.2%,” Pakko said. Those cumulative number can be an indication of how the economy is faring overall, as opposed to strictly looking at revenue.
“To see that individual income tax receipts were up almost 5.5% from the previous year, that’s an indication of strong wage and salary growth. Sales and use tax is up. 3.3%, not quite as positive, but still that’s a gain from the previous year and it shows retail sales and incomes are rising,” Pakko said.
Sales and use tax collections totaled $225 million last month, an increase of $9.4 million compared to last year. According to Pakko, since the sales tax receipts normally correspond to the previous month’s sales, the latest numbers mainly account for the beginning of the holiday shopping season and not its entirety.
“We’ll get a better indication of how the entire holiday season went with next month’s revenue report,” Pakko said.
One component of the sales and use tax, the motor vehicle portion, saw a rebound after a previously slow period. As the December revenue report marks the halfway point of the fiscal year, Pakko says the numbers “tell the story of an economy that’s on a steady growth path.”
“Unless there’s some unexpected, unforeseen downturn over the next six months, it looks like this should be a fairly positive outcome for this year’s Arkansas economy and fiscal outlook,” Pakko said.
