Arkansas concluded Fiscal Year 2026 with a general revenue surplus of $655 million, marking one of the strongest financial performances in state history and highlighting continued economic growth across the state. The surplus, released by the Department of Finance and Administration (DFA), is the fifth largest ever recorded and represents a sharp increase from the previous year’s $367.9 million surplus.
Fiscal Year 2026 ran from July 1, 2025, through June 30, 2026. During that period, gross state revenue collections reached nearly $8.7 billion, which is a gain of $327 million over Fiscal Year 2025. Strong individual income tax and sales tax receipts served as the primary drivers behind the state’s financial results and contributed to Arkansas’ total reserve funds reaching an unprecedented $4 billion.
Individual income tax collections led all revenue categories, generating $3.859 billion. Sales and use taxes followed at $3.666 billion, underscoring consistent economic activity and consumer confidence. After accounting for refunds, deductions, and other required distributions, the state’s net available revenue totaled $7.149 billion.
The entire $655 million surplus was transferred to the General Revenue Allotment Reserve Fund. That fund is composed of unrestricted surpluses from current and prior fiscal years along with investment earnings. Combined with the Catastrophic Reserve Fund and the Arkansas Reserve Fund Set Aside, Arkansas’ total reserves now include $1.814 billion in the Catastrophic Reserve Fund, $1.221 billion in the General Revenue Allotment Reserve, and $1 billion in the Arkansas Reserve Fund Set Aside.
Governor Sarah Huckabee Sanders praised the revenue results and attributed the strong fiscal performance to conservative budgeting and tax policy choices. “Arkansas is doing the impossible: cutting income taxes by 25% while still recording massive surpluses and pushing state reserves to record levels,” Sanders said. She reiterated her intention to continue working with the legislature to gradually phase out the state income tax, which she described as a long‑term priority.
DFA Secretary Jim Hudson said the numbers reflect a healthy state economy heading into Fiscal Year 2027. “Arkansas’ economic momentum is reflected in our FY26 results,” Hudson said. “Personal income tax and sales tax collections were especially strong year over year, a sign that Arkansans are doing well. Our state’s reserves, totaling over $3 billion, are at record levels…the Arkansas economy is strong going into Fiscal Year 2027.”
State officials noted that maintaining high reserve balances is a central part of Arkansas’ long‑term financial strategy. Those reserves help protect the state during economic downturns, natural disasters, or other unexpected fiscal pressures. The record totals provide lawmakers with both financial stability and flexibility as they evaluate tax reform proposals and budget priorities in the coming year. The 96th General Assembly is scheduled to convene its Regular Session on the second Monday in January 2027.
The full monthly and year‑end revenue reports for FY26 are available on the Arkansas Department of Finance and Administration website.
