“Reduce the state’s income tax…repeal the state’s capital gains tax.” Arkansas Policy Foundation, Murphy Commission project, 1998
“(Arkansas) revenues are expanding because the business cycle’s current state is expansion, not contraction.” (Policy Foundation research memo, November 2012)
(December 2013) The state’s November General Revenue Report shows another fiscal year (2013-14) surplus emerging, another reminder that Arkansas’ uncompetitive tax rates can be cut using surplus revenues.
The state Department of Finance and Administration report notes:
“Year-to-date net available general revenues total $2,043.4 million, $69.6 million or 3.5 percent above year ago levels. After five months into the fiscal year, net available revenue is above forecast by $29.4 million or 1.5 percent.”1
The state income tax rate could be cut at least one-tenth of one percent using surplus revenues. Arkansas has the highest tax rate in the region.
Surpluses Occur In Expansions
Another surplus is emerging because surpluses occur in expansions while recessions contribute to a decline below trend.
The U.S. economy has been expanding since June 2009, and Arkansas state government recorded surpluses totaling more than a half-billion dollars in the last three fiscal years. These surpluses were $94 million (2010-11), $146 million (2011-12) and $300 million2 (2012-13).
–Greg Kaza
1 http://posting.arktimes.com/media/pdf/november_2013_end_of_the_month_report.pdf
2 “State’s budget surplus 4th highest in 20 years,” Arkansas Democrat-Gazette, July 14, 2013
