Arkansas ends fiscal year with $295 million budget surplus
LITTLE ROCK, Ark. (AP) — Arkansas ended its fiscal year with a $295 million budget surplus and nearly $74 million of that is going toward highway needs, state finance officials said Tuesday.
The Department of Finance and Administration said the state’s net available revenue collection for the fiscal year totaled $5.9 billion, which was $426.5 million higher than the previous year and $231.2 million above forecast. Arkansas already had a $64 million surplus that was included in the state’s budget.
Arkansas’ fiscal year ended on Sunday.
“As a result of a disciplined approach to spending and a growing economy, we enter next year with substantial reserve funds,” Gov. Asa Hutchinson said in a statement. “The current budget surplus affirms that we are achieving the right balance in lowering taxes; supporting education and health care; and transforming state agencies in the delivery of services.”
Twenty-five percent of the surplus will be transferred to the state Department of Transportation, while the rest will go toward reserve funds for other needs. One of those funds, the restricted reserve fund, now has nearly $50 million. Another, the general revenue allotment reserve fund, now has nearly $243 million.
The Department of Transportation said $50 million of the surplus money it’s receiving will go toward matching funds for another $200 million from the federal government. The remainder will go toward highway maintenance, including highways affected by the recent flooding along the Arkansas River.
The Department of Finance and Administration says the state ended the year above forecast because of high growth in individual and corporate income tax collections. The state’s sales tax collections, however, fell below forecast by $32.1 million.
The surplus comes after the majority-Republican legislature earlier this year approved Hutchinson’s $97 million plan to cut the state’s top income tax rate. Hutchinson in March also signed into law a $95 million highway funding bill that will raise fuel taxes in the state for the first time in 20 years.
The top Democrat in the Senate said he’s pleased with the surplus, which he said will help if the state’s economy faces a downturn, but said it’s also accumulated as other services face funding needs.
“There’s no question there are unmet needs in education. We know we are not funding pre-k the manner it should be. We are not funding catastrophic funding for schools that have children with special needs,” Senate Minority Leader Keith Ingram said.
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