Although budget hearings for the next fiscal year do not begin until the fall, we frequently review revenue reports to ensure our budget is on track. This week, we received the General Revenue Report for May showing net available general revenue totals for the year at $4.9 billion.
After 11 months into the 2018 fiscal year, revenue is $159.9 million or 3.3% above this time last year. It is also $44.2 million more than had been previously forecasted.
July 1st is the beginning of a new fiscal year for state government in Arkansas. As we approach that date, state officials pay close attention the revenue forecast for the previous year and where our current budget stands in relation to that forecast. This gives insight into what they might expect for the upcoming fiscal year.
Arkansas’s two largest sources of general revenue are collected from a portion of the state sales/use tax and from the Arkansas individual income tax. Other general revenue sources include: taxes on alcohol and tobacco products; gaming and pari-mutuel betting on horse and dog racing; severance taxes on oil, minerals, gravel, and natural gas; corporate franchises and corporate income; and real estate transfers.
So far this year, individual incomes taxes and sales tax have generated more revenue than the previous year. Corporate incomes taxes are down.
Our unemployment rate now stands at 3.8%. The national rate is 3.9%. We rank 20th in the nation for the lowest level of unemployment. When more Arkansans are working, our economy strengthens. This is positive news as we approach the next year.
Our Tax Reform Task Force has been diligently studying ways to reform our tax structure. They are in the final months of drafting their recommendations. Positive revenue reports and unemployment rates help guide our decision making process. We will continue to update you on the progress.