Lexington’s revenue numbers holding

Although Lexington’s financial outlook is holding steady, city officials still warn that the worst is yet to come.

Through the first six months of the year, the city’s revenue collection is up $5.3 million, or 4.1 percent, over the same period last year.

The licenses and permits category — the city’s largest revenue area, which includes payroll tax, business net profit tax, insurance premium fees and franchise fees — is up $5.5 million, or 5.5 percent, over the same period last year.

In the payroll tax category, the city has collected nearly $1.5 million more for the year, a 2 percent increase over this time last year.

“We’re thrilled that it appears our revenues have held for the first six months,” said Kyna Koch, the city’s finance and administration commissioner. “But I would still … remain cautious because we’re not terribly optimistic. Again, it’s unlikely that Lexington can sustain this kind of growth in an economy that all around us is painting a very different picture. We are beginning to see some what I would call cracks in the armor that aren’t readily apparent in the numbers that give us a reason to be concerned.”

One of the troubling signs is in the payroll tax, which the city budgeted a 2.5 percent growth over last year. Collections from the payroll tax is currently running 2 percent higher than last year.

“We’re not far enough ahead to make up for what is budgeted and what we know is happening in the government sector,” Koch said.

The governmental sector of the payroll tax has held, but that category is expected to drop in a couple of months because of retirees, Koch said.

For example, the Urban County Government has had 87 retirees this fiscal year, with the bulk of the retirements coming in November, December and January, she said.

Those employees paid payroll tax on their retirement payouts in the months that they retired, but come February those bulk payouts and those employees will no longer be reflected in the payroll tax category, Koch said.

“Our big concern here is how late in this fiscal year are we going to actually see a downturn …,” Koch said. “The further we get into the fiscal year, the harder it will be to recover.”

- Michelle Ku