From the historic hallways of the most beautiful state Capitol in our nation, this is Senator Keith Ingram.
Arkansas is in strong financial shape, thanks to conservative budgeting and a healthy economic environment.
The state finished Fiscal Year 2019 with a budget surplus of $295 million. The Transportation Department will receive almost $74 million of that amount, which it will use to match federal funding and to beef up maintenance and repairs.
The surplus money is coming right on time for highway officials, because the recent floods across much of Arkansas caused an estimated $100 million in damage to infrastructure.
Although the fiscal report is encouraging overall, it contains a few items that should serve as a warning for legislators and budget officials.
For instance, a significant portion of the surplus was due to one-time collections, which will not be repeated in the future.
A perfect example was the increase in corporate income tax collections, which were up 40 percent.
Businesses were taking advantage of changes in the tax code, and we know that such a large increase won’t happen again.
The growth in sales tax collections was relatively small, just 2 percent. That’s less than budget experts had predicted, and it reflects the fact that people are being careful about how they spend money. For example, sales of motor vehicles were below forecast.
But there was plenty of good news, such as the 4.8 percent increase in the amount of individual income tax that was collected. When you consider that the state did not raise tax rates, the 4.8 percent growth rate means more people are working and they’re bringing home bigger paychecks.
The legislature’s response to the fiscal report should reflect that of a typical Arkansas family.
Although we’re encouraged by the economic growth, we’ll continue being very conservative with our spending.
The state of the Arkansas economy is good. We have the opportunity to strengthen reserve funds, so that when rainy days come we don’t have to cut vital services.
From the Capitol, it is always my great honor and sincere privilege to serve you as your state Senator. This is Keith Ingram.