State Revenues Rise - Time to Cut Remaining Food Tax!

by Jason Wiest, Arkansas News Bureau: State revenues rose 7.6% in December behind increased individual income tax collections brought on by payroll timing shifts, state fiscal officers reported Thursday. Revenues rose despite the bite from halving the state sales tax on groceries this summer. Net available revenues in December totaled $415.2 million, up $29.3 million from December 2006 despite a cut in the state sales tax on groceries, and 13.8% above forecast, the state Department of Finance and Administration reported. Individual income tax collections totaled $222.3 million, up $47.3 million, or 27%, compared to December 2006. Collections were $36.8 million, or 19.8% above forecast.

Sales tax collections fell again in December, down $5.7 million from a year ago, or 3.1%, to $178 million. The Legislature this year approved a 50% reduction in the state sales tax on groceries, from 6% to 3%, beginning July 1. The $121 million tax cut, signed into law by Gov. Mike Beebe, as well as other tax cuts were largely responsible for the decline, the fiscal office said. Sales tax collections exactly matched the department's forecast.

Corporate income tax collections totaled $58.1 million, up $5.8 million, or 11%, compared to last year. Corporate income tax collections were $8.4 million above forecast for a 16.9% increase. Tobacco tax collections rose 3.4% since last year to $11.4 million. From collections since the beginning of the fiscal year July 1, net available revenues total $2.2 billion, $26 million, or 1.2%, higher than by December 2006, and $97.1 million above forecast. [Source]

ARRA Editor: Gov. Mike Beebe should demonstrate additional leadership and propose that the an interim legislature move to repeal the remaining 3% in State sales tax on food. Arkansas does not need to continue to generate surplus tax receipts while ignoring to address a tax issue that places an unnecessary burden on low income individuals and families. We do not NEED to tax the basic necessity of life -- food!

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