Arkansas finance officials said Tuesday that state revenues would increase by $89.5 million next fiscal year, but predicted a tight budget as lawmakers prepare for next year's session.
The Department of Finance and Administration released the state's revenue forecast for the fiscal year that begins July 1 and said that the state's revenues will total $4.49 billion in revenue. The forecast predicted increases in individual income and sales tax collections.
Despite the gains, Finance and Administration Director Richard Weiss said the state's financial picture would remain about even when factoring in $100 million in cuts Gov. Mike Beebe made earlier this year.
"There's not going to be much money there to do anything with," Weiss said. "We're essentially where we thought we were going to be this year."
The forecast was the first released under an amendment approved by voters that requires Arkansas' Legislature to meet annually and to budget one year at a time, rather than for a two-year period. Lawmakers will hold their first strictly fiscal session under the amendment in February.
The report predicted an $111.2 million increase in individual income tax collections and a $90.8 million increase in sales tax collections. Officials said they expected a $15.1 million drop in corporate income tax collections and a $10.3 million drop in tobacco tax collections.
Beebe is expected to release his balanced budget proposal before lawmakers begin budget hearings in January.
In October, Beebe ordered state agencies to cut $100 million from their budget after finance officials said they expected to collect less money than they had expected. Most state agencies said they planned to make the cuts by leaving unfilled positions vacant or reduce expenses such as travel or supplies.
Weiss said he didn't expect the state to make another revision to its forecast for the current fiscal year.
Beebe spokesman Matt DeCample said the governor agreed with Weiss' prediction that the figures indicated a tight budget when the Legislature meets next year. DeCample said the governor expected to propose a conservative budget before the session.
"We know we still need to operate with a tight belt, but we're forecasting for some growth," DeCample said. "It looks like we've hit the bottom, but the question now is the speed of the recovery and we're forecasting for a slow recovery."