Gov. Asa Hutchinson
had issued an early warning about lacklustre April revenue numbers for the state and the official report today confirms it.
The bottom line: The net for April, which includes offsetting income tax collections with refunds, was $660.9 million, or $400,000 less than last year, even though helped by a $22 million gain thanks to a timing shift in reporting on corporate tax returns.
The better big picture is for revenue for the first 10 months of the fiscal year: Net was $50 million below last year and $54 million below forecast. Gross revenues fell short of forecast by more than $87 million.
The tax cutting of recent years has not yet unleashed a tidal wave of economic growth, apparently.
This was interesting and not very encouraging news. Amazon
began collecting a sales tax on retail sales in Arkansas March 1. It's my understanding those collections in March would have been reported and remitted in April (though the figures are confidential by law). This much we know: April sales tax collections were $2.4 million below last year and $11 million below forecast. Either economic activity isreally stagnant and people aren't spending or people are spending a load more on the Internet and not just the part for which Amazon accounts.
The bits and pieces are adding up to tight times. Promised general revenue money for the highway department hasn't materialized as expected. The legislature is about to rob tobacco settlement money previously devoted solely to health to sure up the state's bond rating. State pay raises are paltry. Support of education isn't reaching adequacy level. Colleges are being squeezed. And another income tax cut is on the books that isn't yet being reflected. not to mention a giveback of some of the soft drink tax, one tax sector that increased in April.
Mr. Laffer where are you?
Here's the full report.
Here's the official notice of a change in forecast cased on the numbers.