LITTLE ROCK, Ark. — Arkansas is again projected to have a generous amount of money left over once the 2024 fiscal year ends.
However, the Department of Finance and Administration’s latest forecast projected a lower surplus than the state has seen in recent years.
The department forecasts revenue for the state, and with five months remaining in the 2024 fiscal year, the projections show a dip.
However, officials said lower doesn’t always mean negative in this case.
The Department of Finance and Administration released a revised general revenue forecast.
"We were adjusting primarily for the tax cuts passed late last year by the General Assembly and the governor," Department of Finance and Administration Spokesperson Scott Hardin said.
Hardin said they initially forecasted the surplus for the 2024 fiscal year at $423 million. Now, they've adjusted their most recent forecast to $240 million.
“That's still very conservative,” Hardin said. “It's not going to be surprising to see the state surpass that, and we may need to adjust it again before the end of June.”
In 2023, the surplus was in the billions and the second largest the state has ever seen.
“In 2022, $1.6. billion to last year, being $1.1 billion,” Hardin said.
So, why is this surplus smaller, and how will it impact Arkansans? Hardin said the simple answers are tax cuts and returns.
“Those tax cuts mean hundreds of millions of dollars stay with Arkansans. That's money the state is not going to collect,” Hardin said. “The way that Arkansans will see this is they'll see larger tax returns.”
Gov. Sarah Huckabee Sanders' administration has worked to phase out income tax.
According to Hardin, the state lowered the rate individuals pay on their taxes on the state level from 4.9% to 4.4%.
He said phasing out is a responsible approach.
“With those fully implemented, we're still expecting a surplus,” Hardin said. “So, we're showing that the state can cut taxes responsibly and still have a healthy surplus.”
Hardin said the state’s expanding tax base also plays a role in the surplus, with more than 40,000 people moving to the state.
The 2024 fiscal year ends on June 30, so there's still a chance for the surplus amount to change.