General, road fund revenues continue up, budget goals mixed

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FRANKFORT, Ky. (WTVQ) – Despite the ongoing economic impacts of the coronavirus pandemic, the state’s general fund revenues continue to hold their own against the previous budget year and estimates.

The same goes for road fund revenues, although the increase is not as large as the general fund. Overall, road fund revenues likely won’t meet budget estimates.

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Monday, the state Budget Director said March’s General Fund receipts rose 9 percent compared to March of last year, an increase of $78.7 million.

Total revenues for the month were $954.8 million, compared to $876.1 million during March 2020.  Receipts have now grown 5.9 percent for the first nine months of FY21.

For the just completed quarter, total General Fund collections grew 6.7 percent, the largest rate of growth this fiscal year. Growth rates for the three quarters of FY21 have been 5.8, 5.3 and 6.7 percent, respectively.

The official revenue estimate calls for 1.4 percent revenue growth for the fiscal year. To meet the estimate, receipts can decline 11.2 percent over the last three months of FY21.  Last year General Fund receipts declined by 4.5 percent over the last three months.

The budget year ends June 30, 2021.

Road fund receipts for March totaled $132.5 million, a 4.1 percent increase compared to March 2020 levels. Year-to-date receipts have increased 0.8 percent.

After posting small but positive rates of growth in each of the first two quarters of the fiscal year, receipts declined 0.4 percent in the third quarter.

Among the major accounts, State Budget Director John Hicks said:

  • Sales and use tax receipts fell 0.1 percent for the month but have grown 5.9 percent year-to-date. Poor weather in the month of February likely hit the pause button in the strong year-to-date growth trend in the sales tax.
  • Combined corporation income and LLET tax receipts rose 45.2 percent as an increase in the corporation income tax offset a decline in the LLET. For the year, collections in these accounts have increased 28.4 percent.
  • Individual income tax collections rose 15.6 percent in March as withholding and net returns improved by nearly $42.0 million. Collections have grown 4.9 percent through the first nine months of FY21.
  • Property tax collections declined 5.5 percent for the month but have grown 4.8 percent year-to-date.
  • Cigarette tax receipts fell 22.1 percent as the recent trend in volatility in cigarette revenue continues. Year-to-date this account has decreased 3.4 percent.
  • Coal severance tax collections fell 23.6 percent in March with collections of $3.6 million. Collections have declined 12.2 percent through the first nine months of the fiscal year.

Road fund revenue grew 4.1 percent in March, the largest monthly increase since July and the first positive month since November. Receipts for the month were $132.5 million, $5.2 million more than last March.

Road fund collections declined 0.4 percent in the just completed quarter after increasing in each of the first two quarters. Growth rates for the three quarters this fiscal year have been 1.9, 0.7 and -0.4 percent, respectively.

The official Road Fund revenue estimate calls for revenues to increase 5.8 percent for the fiscal year. Based on year-to-date tax collections, revenues must increase 23.8 percent for the last quarter of FY21 to meet the estimate.

Last year Road Fund revenues dropped by 23.6 percent in the final quarter of the fiscal year. Among the accounts, motor fuels fell 11.7 percent, motor vehicle usage revenue grew 30.5 percent, and license and privilege receipts fell 1.7 percent.