Arkansas’ economic future depends on how the state can pay for its workforce.
A new report released Tuesday by the state’s Legislative Fiscal Bureau found that Arkansas’ tax revenues are not nearly enough to cover the state budget and that it is also not sustainable.
The report found that while Arkansas’ economy is strong, it is not sustainable for the foreseeable future.
The report, titled The Arkansas Budget: An Economic Assessment, was released just a week before the state is set to vote on whether to increase its sales tax to help pay for the retirement system.
The Legislative Fiscal bureau’s analysis found that the state will lose $1.1 billion in 2019-20, as it loses $300 million in tax revenue annually, and will lose nearly $4 billion in 2020-21.
That means the state faces a $3.1 million shortfall in its operating budget by 2021-22.
The agency’s projections also put Arkansas in the category of “budget-burdened” states.
The study projects the state would still have a surplus of $1 billion if it was allowed to maintain the current tax structure.
However, the report also found that even with the budget shortfall, the state does not have enough money to pay for pensions.
The state currently has $5.4 billion available for pension funds, but the report projects that by 2027-28, the gap will increase to $8.6 billion, which would amount to more than half of the state.
The state’s projected deficit is due to a variety of factors, including a projected $1 trillion cost of a massive retirement system, a growing cost of administering the Medicaid program, and a significant gap in the retirement tax credit that was supposed to be set to expire in 2021.
While the state has struggled to make up for the $1-trillion shortfall, it has done its best to fill the gap by making cuts to state agencies.
The budget office also released a budget proposal that would raise taxes on some of the richest Arkansans.
The governor has proposed raising taxes on the middle class, which has already been hit hard by a state tax cut.
The budget office said that while the cuts to middle-class tax breaks will be offset by higher taxes for wealthier households, the impact of these tax increases will be felt in other parts of the economy.
A spokesman for Governor Asa Hutchinson told ABC News the governor was “not in a position to say that these proposals are fair.”
He added that the governor is open to the possibility of a bipartisan compromise on the issue, but that the proposals put in place are “unacceptable.”
The report comes just days after Gov.
Asa Hutchison signed into law a bill that would increase taxes on middle-income families and the wealthiest people in the state, according a news release.
The bill also includes new taxes on high-income earners and a new tax on companies that ship jobs overseas.
The legislation is being touted as a boon to the state economy.
A recent report from the National Bureau of Economic Research projected that the tax increase would result in $1 million in annual economic growth for Arkansas.