As pandemic eases, state revenues continue to soar above 2020 levels
FRANKFORT, Ky. (WTVQ) – The Office of State Budget Director reported Thursday that May’s General Fund receipts rose 56.7 percent compared to May of last year, an increase of $442.7 million. Total revenues for the month were $1,223.7 million, compared to $781.0 million during May 2020.
Last year’s receipts, in May 2020, occurred during the midst of the short-lived but pronounced pandemic-related recession. Hence, all the major tax categories had increases with sales and income taxes having the largest increases.
The official budget estimate calls for revenues to grow 1.2 percent for the entire fiscal year. Receipts have now grown 14.3 percent for the first eleven months of FY21. General Fund receipts stand at $11,610.6 million through May while the official enacted estimate is $11,704.0 million for the entire FY21.
Road Fund receipts for May totaled $148.9 million, a 55.4 percent increase compared to May 2020 levels. Year-to-date receipts have increased 9.0 percent.
State Budget Director John Hicks noted that the individual income tax was subject to timing issues associated with filing deadlines. The sales tax continues to be a major engine of growth in the General Fund.
“Three of the five highest months of sales tax collections in Kentucky’s history have been January, April, and May of 2021. Sales tax receipts are up 11.5 percent year-to-date. The May growth rate for sales tax receipts of 33.9 percent is misleading since May 2020 occurred during the recession. Individual income taxes growth rates are similarly affected since tax year 2019 returns had a July 15, 2020 deadline and the recent tax year 2020 returns had a May 17, 2021 deadline, so timing makes them difficult to compare,” Hicks said.
” For both the business taxes and the individual income tax receipts, a fairer comparison will be forthcoming a month from now in the press release for June receipts since results for the entire April-June quarter will be available. Notwithstanding any issues of timing, General Fund receipts have now grown 14.3 percent through the first eleven months of FY21 and will exceed the official estimate by a wide margin.”
Among the major accounts:
- Sales and use tax receipts increased 33.9 percent for the month and have grown 11.5 percent year-to-date.
- Corporation income and the Limited Liability Entity tax (LLET) receipts were $44.9 million higher in May 2021 compared to last year when the combined receipts were negative due to a surge in refunds. Collections in these accounts have increased 68.7 percent for the year. For the month, corporation declarations and net returns both increased by a combined $49.5 million while LLET receipts declined by $4.6 million.
- Individual income tax collections increased 76.5 percent in May due, in part, to the difference in the filing deadline from last year. Declarations and payments with returns were each up by more than $100 million. Withholding increased by 9.4 percent and has grown 5.7 percent year-to-date. Receipts have now increased 14.8 percent though the first eleven months of FY21.
- Property tax collections increased 83.6 percent, or $13.3 million, in May. All the major components of this tax increased in May and year-to-date receipts are up 8.8 percent, particularly tangible property tax revenues, including on motor vehicles. The FY21 growth rate in property taxes is the highest this century.
- Cigarette tax receipts fell 34.5 percent in May and are down 4.2 percent year-to-date. Cigarette tax receipts have been very volatile this fiscal year as high growth months are usually followed by sharp downturns in the following month.
- Coal severance tax receipts rose 12.7 percent in May to $4.7 million. Collections have declined 8.8 percent through the first eleven months of the fiscal year.
Road Fund receipts increased 55.4 percent in May 2021 with collections of $148.9 million, the second highest month ever and second only to April 2021 receipts. May receipts were $53.1 million more than last May, resulting in large part from suppressed collections in May 2020 due to the pandemic. Year-to-date collections have increased 9.0 percent. Among the accounts, motor fuels receipts have rebounded in the last two months, rising 42.3 percent in May, but down 0.7 percent for the year. Motor vehicle usage revenues increased 83.6 percent and are up 24.7 percent year-to-date. License and privilege receipts rose 36.3 percent. The official Road Fund revenue estimate calls for a 5.8 percent increase in revenues for the fiscal year.
To view numbers go to: http://www.osbd.ky.gov