Declining revenue means Arkansas must work harder to protect children and families

The Arkansas Department of Finance and Administration released the December Revenue Report today.  As expected, it’s more bad news for state revenue collections and the state budget. The report only underscores what we have been thinking for months now. We must do something to shore up funding for critical programs serving children and families in the upcoming budget-only legislative session.

Below are three significant findings from the report. To review the report in its entirely, click here.  Please note that comparisons cited in the report are against the revised (and lower) general revenue forecast issued in October. Stay tuned in the coming weeks for more AACF’s analysis.

December Net Available General Revenues total $376.2 million, $22.7 million or -5.7 percent below last year and $20.9 million or -5.3 percent below forecast. Collections were down in all major categories by 6 to 10 percent compared to year ago December levels and by 5 to 8 percent compared to forecast.

Year-to-date Medicaid Program Trust Fund: Year-to-date collections of the dedicated soft drink tax total $23.4 million, a decrease of $1.1 million or -4.7 percent below last year.

Year-to-date Net Available General Revenues: Year-to-date net available general revenues total $2,244.9 million. This amount is $37.8 million or -1.7 percent below last year and $54.9 million or -2.4 percent below the general revenue forecast. The amount below forecast is due to a mix of declines across all the major revenue categories. Gross Receipts (Sales and Use Tax) are below forecast the most in absolute terms, by $27.7 million or -2.7 percent. This decline relative to last year stems from a combination of weak consumer sales, business-to-business sales, weather effects, and a series of non-recurring refunds. Corporate Income Tax collections are below forecast by $7.3 million or -3.1 percent.