Legislative Council hears February revenue report showing modest surplus but warns of timing volatility

Carlos Silva, with the Bureau of Legislative Research, told the Arkansas Legislative Council on March 18 that February gross receipts totaled about $5.36 billion and net collections were roughly $4.5 billion, about $163.7 million higher than the same point last fiscal year.

"As we look into page number 1, you see a $5,360,000,000... They're collecting gross revenues," Silva said as he walked members through the February 2026 Monthly Revenue Report. He said the Fiscally Net Available (FNA) forecast has been updated and now shows an expected surplus near $334 million, up from an earlier estimate of about $185 million.

Members pressed Silva about specific category declines. Representative Wooten pointed to month-to-month minuses in corporate and beverage taxes and asked whether those declines reflected a troubling trend. Silva attributed many of the month-to-month drops to timing effects, refunds and earlier policy changes, and he warned against overinterpreting short-term moves: "So first of all, when you look into some of the taxes... some of those gross sales tax numbers have come in late," he said, adding that a recent winter storm also likely affected collections.

Silva also highlighted category-level timing anomalies — for example, large percentage changes in driver-search fees tied to when transactions are recorded — and noted that payroll and other national-level fluctuations are visible in private-sector data.

Why it matters: the updated forecast improves the projected surplus compared with earlier estimates but does not eliminate uncertainties that could alter the budget outlook. Several members asked Silva whether international events, such as the war in Iran, could affect Arkansas revenues; Silva said the duration of such conflicts would determine broader impacts and declined to speculate beyond the data in front of staff.

What’s next: Silva said staff can model alternative scenarios if members want deeper analysis on specific risk factors but recommended caution about drawing long-term conclusions from one month’s report.