Arkansas Economy

Arkansas State Chamber of Commerce/Associated Industries of Arkansas President and CEO Randy Zook says the business community’s reaction to a Biden executive order mandating vaccines has been "muted." He also said an upcoming legislative session to reform the tax code should include changes to the corporate income tax.

While COVID-19 has impacted tourism and travel as well as business expansion, Arkansas is pushing forward to remain open and ready for business. Tourism and economic officials in Arkansas have spent many years trying to convince people to work, live and play in Arkansas.

Bentonville think tank Heartland Forward released a report Wednesday that offers guidance to Arkansas policymakers seeking to strengthen the state’s economic rebound and growth as it recovers from the COVID-19 pandemic.

Gov. Asa Hutchinson’s Arkansas Economic Recovery Task Force commissioned the study, called the Arkansas Economic Recovery Strategy. For a PDF of the 77-page study, click here.

According to a news release, Heartland Forward analyzed comprehensive data across six critical economic areas for the report:

Arkansas ended fiscal year 2021 with a revenue surplus of $945.7 million thanks in part to a COVID-19 induced shift in a tax filing deadline from April to July that pushed some of fiscal 2020 income tax payments into 2021.

The state’s tax revenue surplus in the previous two fiscal years totals $1.315 billion.

The Arkansas Department of Finance and Administration (DFA) reported Friday that gross revenue for fiscal year 2021 (July 2020 to June 2021) is $8.121 billion, up 16.6% compared with the previous fiscal year and up 18.2% over the budget forecast.

A new program aims to provide low-income Arkansans with financial support for broadband internet access.

State and local officials, including Gov. Asa Hutchinson and Little Rock Mayor Frank Scott Jr., are partnering on a public awareness campaign for the Emergency Broadband Benefit Program from the Federal Communications Commission.

University of Arkansas Walton College economist Mervin Jebaraj says the April 2021 Arkansas jobs report is layered with good news.

Labor officials reported two weeks ago that Arkansas’ jobless rate in April remained stable at 4.4% from March and it was dramatically down from the 10% unemployment rate recorded in April 2020 during the height of the COVID-19 pandemic.

Jebaraj said April was good because it reversed a three-month trend of people exiting the state’s labor force.

Political leaders in Arkansas are strategizing methods to attract more businesses around the country to the Port of Little Rock. On Tuesday, three members of the state’s congressional delegation toured the facility by bus to discuss the progress of the area’s infrastructure.

U.S. Rep. French Hill was joined by fellow Republicans, senators Tom Cotton and John Boozman to meet with Port Director Bryan Day. They engaged in an open dialogue with businesses located at the port to discuss how to make Arkansas more desirable as an economic partner.

Arkansas' revenue has outpaced expectations for the month of May, while the state's budget surplus has risen to its highest level.

The state's net available general revenue for the month of May totaled just over $655 million, nearly an 80% jump over this time last year and about $263 million above forecast.

Murphy USA Inc. plans to hire 3,000 workers across its 1,650 stores to support the company’s continued growth. The El Dorado-based company, with an estimated 2 million customers per day, will seek full-time and part-time employees, according to a press release from the company.

Current incentives include a 2021 Summer bonus of $500 at select stores for new team members who are hired by May 31.

Road and river travel continues to be affected as the closure of the Interstate 40 bridge over the Mississippi River stretches on.

Transportation officials said repairs could take months after the bridge was closed Tuesday following the discovery of a crack in a steel beam during an inspection.

Calendar shifts with tax filing, an improving economy and federal stimulus payments helped boost April tax revenue almost 20% more than the forecast, and pushed the state’s year-to-date revenue surplus – “net available revenue” collected beyond the estimate – to $716.8 million.

UA Walton College economist Mervin Jebaraj said new tax cuts and those proposed for later this year could help in a variety of ways, especially for lower income Arkansans, and he suggested the state’s businesses will have to work harder to overcome a national negative reputation in the wake of this year’s high-profile controversies in the legislature.

Tax revenue through the first nine months of Arkansas’ fiscal year is up 7.5%, and the fiscal year-to-date revenue surplus – “net available revenue” collected beyond what was estimated – totaled $549.9 million.

The February tax revenue report again shows broad year-over-year gains to include an almost 15% increase in statewide sales and use tax revenue – a sign that consumer spending appears to be robust.

Arkansas’ tax revenue picture continues to be impressive, with gross revenue for the first seven fiscal months (July-January) up almost 10% compared with the same period in 2019-2020. January revenue was up more than 20% above forecast.

Arkansas employers added more than 65,000 jobs between November and December, pushing the state’s jobless rate down from 6.3% in November to 4.2% in December, according to Tuesday’s report from the U.S. Bureau of Labor Statistics.

The number of employed in Arkansas during December was an estimated 1,303,673, down 12,396 jobs compared with December 2019. The year-over-year job losses are down considerably compared to the 78,011 jobs between November 2019 and November 2020.

Arkansas businesses can now apply for a second round of loans through the Paycheck Protection Program, or PPP.

The second set of loans from the federal program opened to businesses getting loans from lenders with under $1 billion in assets late last week, and will open for all other businesses Tuesday.

Gov. Asa Hutchinson and officials with Mars Petcare were in Fort Smith on Friday to announce a $145 million expansion of the company’s plant at Chaffee Crossing that will create more than 120 jobs.

Arkansas’ economy continues to outperform its forecasts, according to the most recent revenue report.

The December revenue report, released Tuesday by the Department of Finance and Administration, shows the state’s net available general revenue totaled $530.3 million for December, which is 7.3% above forecast, but $17.2 million or -3.1% below last year’s amount.

Gains in retail and vehicle sales, along with a shift in individual income tax payments, continue to show up in Arkansas tax revenue that beats estimates. For the first five fiscal months (July-November), gross revenue is up almost 12% compared with the same period in 2019.

The Arkansas Department of Finance and Administration reported Wednesday that gross revenue for fiscal year-to-date is $3.092 billion, up 11.9% compared with the same period in 2019 and up 11% over the budget forecast.

A company that produces disinfectant wet wipes is expanding its facility in northeast Arkansas. Gov. Asa Hutchinson joined Nice-Pak officials online Monday to make the announcement. The New York-based company is among the world’s largest wet wipes producers.

Chairman and CEO Robert Julius says the Jonesboro facility has shifted to around-the-clock operations to meet rising demand amid the pandemic. Even prior to the pandemic, the company employed about 400 people at the plant.

Tax revenue in Arkansas' first four fiscal months (July-October) totaled $2.558 billion, up 13.8% from the same period in 2019 and 12% over the budget forecast. The increase has resulted in $242.6 million in revenue above what was expected.

The group tasked with disbursing the $1.25 billion Arkansas received from the CARES Act has approved new funds to go toward stabilizing the state’s Unemployment Insurance Trust Fund.

Members of the state CARES Act steering committee on Friday voted to approve the infusion of $165 million from the federal coronavirus bailout to the fund at a meeting held virtually. This comes as the panel faced a deadline of Sept. 30 to stabilize the fund, otherwise employers would have to pay an extra $10 per employee per year in taxes.

As measured by double-digit gains in sales tax revenue in the state’s August report, Arkansans continued to spend through the summer despite COVID-19 worries, with gross revenue up almost 30% to $1.331 billion during the first two months (July-August 2020) of the fiscal year.

The gross general revenue was up 29.4% compared to the same period in 2019, and up 11.2% above the budget forecast, according to Wednesday’s report from the Arkansas Department of Finance and Administration (DFA).

Arkansas State tax revenue in July totaled $766.8 million, up 47.2% thanks to an almost 90% growth in individual income tax resulting from a tax deadline shift from April to July, according to Tuesday’s report from the Arkansas Department of Finance and Administration.

A 225-year old Italian company with a large North American presence is expanding manufacturing operations in Central Arkansas.

Fiocchi of America, the U.S. subsidiary of Italy-based Fiocchi Group, announced plans Wednesday to establish a new manufacturing facility in Little Rock. It will invest $15 million in a new facility and hire 85 skilled employees with plans to further increase its workforce as the facility reaches its full potential.