The state revenue report for December is out. It's bad.
The net state tax income for December was down more than 5 percent from both the same month a year ago and from the forecast, which was not so long ago reduced to reflect these trying times. The drop in revenue was sharp enough to put collections for the first half of the year below the same period last year and the forecast for the year.
"It's not good," said Gov. Mike Beebe's spokesman Matt DeCample. "We're going to have to live within our means as a state like every individual and business has to do." The governor will file a budget for the next fiscal year next week. A drop in previous spending estimates is expected.
Hope remains for a recovery based on national indicators, but clearly, it's going to be slower coming than hoped.
"We're trying to figure out where we go from here," said Tim Leathers, deputy director of Finance and Administration. "It certainly looks like we'll have to decrease the forecast for this fiscal year, but it will take us a while to figure out how much we do and where."
Arkansas is now looking at the possibility of finishing a second year with an overall decline in revenue. This has implications for the next fiscal year, of course, beginning July 1. That forecast will drop, too, and with it the chances for even a small state employee pay raise, about 2.3 percent, discussed in the 2009 legislative session.
This news comes, too, on news of a sharp drop nationally in pending home sales, a sign that a recovery not only hasn't fully arrived, it may not be just around the corner.