Leader Blues

Monday, August 07, 2006

TOP STORY>>Petrus, Glover split on surplus

IN SHORT: House speaker tells Lonoke chamber he’s in no hurry to return $402.7 million in excess funds to taxpayers.

Leader staff writer

House Speaker Rep. Benny Petrus, D-Stuttgart, said Thursday he is in no hurry to refund part of the $402.7 million state surplus to taxpayers, but Sen. Bobby Glover, D-Carlisle, wants to make sure a tax rebate becomes a reality not just rhetoric.
Petrus and Sen. Jack Critcher, D-Batesville, the Senate president, promised more than 60 Lonoke Chamber of Commerce members that the 86th General Assembly would take a slow, studious and sensible approach on what to do with the $402.7 million state surplus.

But Glover told The Leader, “We need to be very cautious on how we spend the people’s money. I’d like to see a little of it go into a rainy day fund for the state and rebates to the taxpayers. Under no circumstances should there be a tax hike in the next two years.”

During his monthly radio call-in show Wednesday, Gov. Huckabee said he still hopes lawmakers will find a way to return a portion of the surplus to taxpayers.

Arkansas ended the previous fiscal year June 30 with a $402.7 million surplus, the largest in the state’s history.

Revenue officials have projected a $234.5 million surplus for the end of this fiscal year. That, plus surplus money left over from 2005 and 2006, would give the state a total projected surplus of roughly $721 million.

So far, the 2007 fiscal year is off to a good start.

July’s revenues totaled $378.5 million, up $74.6 million from a year ago, a 24.5 percent jump. Revenues were $3.9 million, or 1 percent, higher than originally forecast.

Individual income-tax collections totaled $173.9 million, an increase of $22.1 million or 14.5 percent over last year. The collections are $1.8 million higher than forecast, a 1 percent increase.

Gross receipts collections totaled $186.9 million, an increase of $16.6 million or 9.8 percent over last year. Collections were above forecast levels by $300,000.

Corporate income-tax collections to-taled $20.3 million, an increase of $5.4 million or 36.1 percent over last year. Corporate tax collections were $1.2 million or 6.3 percent above forecast.

“State agencies are pretty good at manufacturing needs so we need to separate the genuine needs from the ‘wants’ and be very conservative,” Critcher said.

Critcher said legislators plan to discuss two other bright spots in Arkansas’ economic future, bringing bio-fuel manufacturing plants to the state and exploration of the Fayetteville Shale natural gas deposit.

Bio-fuel is made from animal or vegetable oil like that found in soybeans. Arkansas ranks eighth in the nation in soybean production with an estimated 3 million acres planted each year.

Petrus, an automotive dealer in Stuttgart, said bio-fuel production in Arkansas would have a huge impact on families.
“We have to break our dependency on foreign oil. We wouldn’t be over there (in the Middle East) losing men and women’s lives if it wasn’t for oil and we could bring farming back to where farmers could survive,” Petrus said.

The Fayetteville Shale natural gas deposit is estimated to be at least 3,000 feet below ground in parts of Van Buren, Faulkner, Cleburne, Conway, White, Prairie, Jackson, Independence, Wood-ruff, Monroe, Phillips, Lee, St. Francis and Cross counties.

Earlier this year, University of Arkansas researchers reported that development of the Fayetteville Shale could potentially generate $5.5 billion for Arkansas’ economy through 2008, along with nearly 10,000 jobs and $358 million in state and local tax revenue.
The Associated Press contributed to this article.