Little Rock, Arkansas – Arkansas’ fiscal year finished with a surplus of more than $1.1 billion, the second-largest in the state, according to financial officials’ announcement on Wednesday.
The state’s net available funds for the fiscal year that concluded on Friday reached close to $7.2 billion, according to the Arkansas Department of Finance and Administration. Individual income tax collections for the state came in below last year’s totals but higher than expected, while corporate income and sales tax revenues above both last year’s totals and projections.
“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.
Arkansas reported a $1.6 billion surplus in the preceding fiscal year, breaking the previous record for a surplus. Over the past three years, the state has reported its three highest surpluses.
“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.”
UAMS and other projects related to education have already received $400 million from this year’s surplus.
There is still uncertainty over the remaining 700 million dollars. That choice will be made by the governor and the legislature. The funds will first be placed in a holding account.
In recent years, Republican politicians in Arkansas have campaigned for tax cuts by pointing to the state’s surpluses. Republican governor Sarah Huckabee Sanders signed a bill reducing individual and corporate income taxes by $124 million annually into law in April.
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.”