Arkansas has beaten its projected revenue numbers for the ending fiscal year, according to state officials.
Gov. Asa Hutchinson announced that the state exceeded the revenue projection by approximately $360 million for the fiscal year that ended June 30.
“It’s good news that we will end the fiscal year in Arkansas $360 million ahead of where we thought we were going to be. We revised our revenue forecast down. We have gained in terms of our economy in Arkansas – [it] did not take the dip we expected it to and because of that, we’re $360 million ahead,” he said.
In March 2020, Arkansas Department of Finance and Administration Secretary Larry Walther revised the state’s revenue projections due to the impact expected from the COVID-19 pandemic. Hutchinson told reporters during a March 23 press conference that the state would be facing a $350 million budget shortfall due to business slowdowns – costing the state $168 million in revenue. State officials moved the tax deadline to July 15, a move in line with the federal tax deadline, which was expected to have an effect on the state coffers.
“What this means is, in addition of much of Category B being funded because of the increased revenue – public school fund and higher education. It also means that we will be able to restore $72 million to the Medicaid Trust Fund,” Hutchinson said.
Walter has revised the upcoming fiscal year’s revenue forecast, putting the total at $5.624 billion.
As a result of exceeding the revenue forecast, several budget items will be restored. Hutchinson said that $121 million will be restored to the Public School Fund and $42.4 million will be restored to institutions of higher learning.
There will also be $72 million restored to the Medicaid Trust Fund, which Hutchinson said would restore it to its starting total at the beginning of the past fiscal year. He said that there would be approximately $255 million in the fund.
The state still has roughly $152 million in long-term reserves as well as $225 million in unallocated reserves, which must be appropriated by the Arkansas General Assembly.
Hutchinson also authorized merit pay increases for state employees. The increase will be for 2.2 percent. “This is a recognition that they’ve worked very hard, particularly during this pandemic in delivering state services,” he said.