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Cha-Ching! State begins new fiscal year on positive note

August 11, 2014 | | Comments 0

By Jack Brammer

jbrammer@herald-leader.com

FRANKFORT — Kentucky’s new fiscal year is getting off to a positive start.

State budget director Jane Driskell reported Monday that Kentucky’s General Fund, which pays for most programs, saw its receipts total $705.9 million in July, a 2.2 percent increase over the same month last year.

July was the first month of the state’s new 2015 fiscal year.

When the last fiscal year ended June 30, Democratic Gov. Steve Beshear had to plug a $91 million shortfall in the state’s $9.5 billion budget after a year of sluggish collections on state income taxes.

He did that by dipping into budget accounts of several state agencies, taking $21.2 million from the state’s $98.2 million” rainy day” or emergency fund and cutting $3 million in state spending.

Driskell said the General Fund growth of 2.2 percent in July is “a positive sign – especially since our two largest taxes – individual income and sales tax – grew at robust levels of 5.9 percent and 7.6 percent, respectively.

“Our expectations are that the underlying economic momentum continues to build.”

The official revenue estimate for fiscal year 2015 calls for revenue to increase 3.6 percent compared to last year’s actual receipts.

Based on July’s results, General Fund revenues need to increase 3.7 percent for the remainder of the fiscal year to meet the official estimate.

Among the state’s major accounts in July, individual income tax receipts rose 5.9 percent, sales tax revenue grew 7.6 percent, cigarette tax collections rose 2.3 percent and the payment to the state from the lottery increased by 3.1 percent.

But corporation income tax collections fell 64.6 percent. The state attributed that to a large one-time payment received in July 2013.

In July 2014, coal severance tax revenues declined 14.8 percent and property tax receipts fell 45 percent. Driskell noted that a small share of property tax receipts is received in July.

Driskell also announced that Road Fund revenues for July totaled $125.4 million, an increase of 5.1 percent compared to last July.

“Growth in the important Road Fund accounts was small but positive in July,” she said. “That is good news given that the forecast for fiscal year 2015 has Road Fund receipts declining slightly.”

For July, motor fuels tax receipts rose 2.8 percent, motor vehicle usage tax jumped 1.4 percent and license and privilege taxes grew 36.3 percent. Non-tax receipts dropped 30.9 percent.

The official revenue estimate for this new fiscal year calls for revenues to decline 0.9 percent compared to last year’s actual receipts.

Based on July’s receipts, revenue can fall 1.4 percent for the rest of the fiscal year and still meet budgeted levels.

 

Filed Under: State BudgetState GovernmentSteve Beshear

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