The final tally for the fiscal year ending June 30 shows Arkansas collected less tax revenue than the previous year — $6.451 billlion, or $19.2 million less than the year before.

Individual income tax collections were $40.2 million below the previous year while sales and use taxes were up $92 million, or about 4 percent, over the previous year. The state had an income tax cut during the year and employment rose, a good marker for sales taxes.  With refunds, the net collections increased 4.4 percent, however.

The state net presented a rosier picture because of what Gov. Asa Hutchinson has called “conservative budgeting.” That is, he’s intentionally tightened state spending in some areas — no pay raises, for example — to create a surplus that he wants to devote in part to highway construction, a historic raid on general revenue.

After mandatory off-the-top deductions, net revenue was $117.3 million, or 2.2 percent more than the previous year and 2.7 percent above forecast. That produces a “surplus” of $177.4 million that the governor plans to use for highways and other directed purposes.

The June totals reflected the year-long trend: Gross revenues were down 6.9 percent from the same month a year ago, but higher than the stingy forecast.


You can budget less and less to produce “surpluses.” But if gross collections continue downward, something eventually has to give.

At a news conference, Hutchinson chose to emphasize the “net” rather than gross figures. And continues to promise more tax cuts. He also announced a trip to Europe to encourage economic development. The state is opening an office in Berlin.