Arkansas reinstates $60M that was cut from state’s budget

LITTLE ROCK — Arkansas officials announced Friday they’re reinstating $60 million that was cut from the state’s budget earlier this year, crediting a rebound in sales tax revenues over the past couple months for boosting the state’s finances.

The Department of Finance and Administration announced it would revise its forecast for the fiscal year, which ended Friday, and said Arkansas would end the year with $5.3 billion in net available revenue. The state had cut $70 million from its revenue forecast earlier this year because of sluggish tax collections.

“We’ve had an unusual year in many regards,” Larry Walther, the department’s director, said in a statement. “Sales taxes were down for much of the year and behind our expectations. However, that changed for the better over the last two months.”

The department did not release how much in sales taxes Arkansas collected in June, and said additional information will be in the state’s revenue report for the fiscal year coming out next week. The department said $43 million of the restored money will go toward the state’s Medicaid Trust Fund.

“The process is how you responsibly manage a state’s budget and how you avoid problems and control costs. That’s what we’re doing,” Gov. Asa Hutchinson said in a statement. “After reviewing the numbers for June, it was clear that an upwards revision to the budget was an option. By doing so, we are able to replenish the Medicaid Trust Fund, and that’s good news for Arkansas.”

Hutchinson in April ordered the budget cuts to several agency programs under a lower priority category of the state’s budget, but the reductions didn’t prompt any layoffs. A DFA spokesman said the state has not changed a revision in May that prompted $43 million in cuts from the budget for the fiscal year that begins Saturday.