KY General Fund receipts rise 23.3 percent, Road Fund’s drop 12.8 percent

May 12, 2015 | | Comments 0

By Jack Brammer

FRANKFORT –Kentucky’s General Fund, which pays for most state programs, had its best month ever in collections in April and is expected to finish this fiscal year on June 30 with a $46.1 million surplus.

But the state’s Road Fund, which pays for highway and other transportation projects, dropped 12.8 percent in April collections and is on course to end this fiscal year $11.1 million short of what was expected.

The Jekyll-and-Hyde financial news for the state came Tuesday when state budget director Jane C. Driskell reported that Kentucky took in more than $1 billion in General Fund receipts in April, the most ever for any month in the state’s history.

Total General Fund revenues for the month were nearly $1.03 billion, compared to $830.2 million in April 2014.

That’s a gain of $193.5 million or a whopping 23.5 percent increase.

The previous monthly all-time high was $979.1 million in June 2014.

With the strong April, the state is now expected to end this fiscal year on June 30 with $46.1 million more than budgeted, Driskell said.

That would “be a remarkable turnaround given that we ended last fiscal year with a $90 million revenue shortfall,” she said.

For the first 10 months of fiscal year 2015, state receipts have grown 6.2 percent.

The budget enacted by the state legislature calls for 3.6 percent growth in revenue.
That means revenue collections in May and June can drop 7.8 percent from those months in 2014 and the state still would meet its General Fund budget of about $9.8 billion.

Driskell said she was pleased with April’s receipts but noted that the last three months of almost every fiscal year typically contains “some timing issues, especially in the income taxes, that create variability in monthly growth rates.”

She also said Kentucky is seeing strong signs of economic improvement.

Those signs, she said, are consistently strong collections in the withholding and sales tax, low unemployment, growth in personal income and higher consumer spending.

“We are confident that when we close the books on this fiscal year, revenue growth will exceed the budget amount,” she said.

Among the major accounts in April, sales and use tax receipts increased 7.3 percent for the month and have grown 4.4 percent so far this year.

Individual income tax collections grew 39.5 percent in April.

Growth in this account was broad-based and the withholding component posted a 12.3 percent increase in April indicating a strong labor market.

Total individual income tax receipts have grown 11.4 percent though the first ten months of this fiscal year.

Business tax collections showed a solid pattern of growth in April.

Corporation income tax receipts grew 4.4 percent and have increased 1.6 percent for the year.

The limited liability entity tax, a backstop to the corporate income tax, grew 47.8 percent with nominal growth of $14.8 million.
Property tax collections rose 0.6 percent and are up 0.9 percent this fiscal year.

Cigarette tax receipts grew 14.6 percent but are down 2.3 percent year-to-date.

Coal severance tax receipts fell 7.5 percent for the month and are down 7.2 percent through the first 10 months of the fiscal year.

While the General Fund receipts blossomed in April, the Road Fund receipts of $115.1 million dropped 12.8 percent and the state is expected to end this fiscal year with an $11.1 million shortfall.

The decline in April was generally across the board as most of the major accounts experienced declines.

The official Road Fund revenue estimate call for revenues to decline 0.9 percent for the fiscal year.

Based on year-to-date tax collections, revenues must increase 0.8 percent for the remainder of the year to meet the estimated budget of about $1.5 billion.

Among the accounts, taxes on motor fuels fell 14.8 percent due to a lower tax rate.

Motor vehicle usage revenue decreased 2.9 percent as vehicle sales are not outpacing the new tax credit for trade-ins on new vehicles.

License and privilege receipts decreased 16 percent.

The Office of State Budget Director’s third quarter economic and revenue report projects that the Road Fund will fall short of the official estimate by $11.1 million.

Filed Under: State Budget

About the Author:

RSSComments (0)

Trackback URL

Comments are closed.