LITTLE ROCK, Ark. — The fiscal year ended in Arkansas with a surplus of more than $1.1 billion, the state's second-largest, finance officials announced Wednesday.
The Arkansas Department of Finance and Administration said the state's net available revenue for the fiscal year that ended on Friday totaled nearly $7.2 billion. The state's individual income taxes came in below last year's numbers but above what was forecast, while corporate income and sales tax collections were above last year and forecast.
“The economy outperformed expectations across the fiscal year in revenue results amid volatility from slowing inflation, tax reductions, and tight labor markets," Finance and Administration Secretary Larry Walther said in a statement.
The record for a surplus was set in the previous fiscal year when Arkansas reported a $1.6 billion surplus. The state has reported its three highest surpluses over the past three years.
"What's interesting is that we are seeing these record surpluses, but at the same time, we are seeing these dramatic tax cuts," Finance and Administration Spokesperson Scott Hardin said "You'd expect to collect a little less, but that's not the case."
Four hundred million dollars from this year's surplus has already been allocated to things like education initiatives and UAMS.
The 700 million dollars that are remaining have yet to be decided. The legislature and the governor will make that decision. Until then, the money will go into a holding fund.
Republican lawmakers have cited the state's surpluses as they've pushed for tax cuts in Arkansas in recent years. In April, Republican Gov. Sarah Huckabee Sanders signed into law a measure cutting individual and corporate income taxes by $124 million a year.
Alexa Henning, a spokesperson for Sanders, said the governor “will continue working to responsibly phase out the state income tax. Henning said that "being financially sound and strong helps keep us moving in that direction.”
The largest surpluses in Arkansas history are:
- Fiscal Year 2022: $1.6 billion
- Fiscal Year 2023: $1.1 billion
- Fiscal Year 2021: $945 million
- Fiscal Year 2007: $409 million
- Fiscal Year 2006: $402 million
THV11 contributed to this report.