Despite pandemic, state’s revenues hold their own in August
FRANKFORT, Ky. (WTVQ) – Despite the ongoing coronavirus pandemic, state revenues continue to hold their ow so far.
Thursday, State Budget Director John Hicks reported General Fund receipts increased 5.9 percent in August compared to last year.
Total revenues for the month were $833.8 million, compared to $787.2 million during August 2019. August receipts have reflected the smallest share of yearly amounts over the last five years.
So far this fiscal year which began July 1, General Fund receipts have increased 6.5 percent.
Road Fund receipts for August totaled $140.8 million, a decrease of 1.0 percent from August 2019. Through the first two months of the fiscal year, collections in this fund have increased 2.9 percent.
Hicks noted after some recent months of significantly lower tax collections due to the novel coronavirus, receipts have rebounded.
“We saw the worst quarterly declines in General Fund receipts from April through June since the Great Recession. Growth rates in July and August have ticked upward supported by substantial federal relief payments to individuals and businesses,” Hicks said.
“Sales and use, and the individual income taxes have been the main drivers of the improvement in collections. Total General Fund collections have increased $106.1 million in July and August over the prior year with sales and individual income taxes accounting for all of the increase,” he continued.
“Currently, the primary revenue concern is keeping up the momentum in economic activity in spite of the expiration of much of the federal fiscal policies designed to help the economy. Without another round of federal fiscal stimulus, it will be difficult to maintain the growth in collections we have seen thus far,” Hicks concluded.
The official revenue estimate for FY21 calls for revenue to increase 0.3 percent compared to FY20 actual receipts. Based on Augusts results, General Fund revenues can decline by 0.7 percent for the remainder of the fiscal year and meet the official estimate.
Among the major accounts:
- Individual income taxes rose 7.8 percent on the strength of withholding collections which were up 10.6 percent. When the impact of withholding on unemployment insurance benefits is removed, growth in withholding was 7.9 percent.
- Sales tax revenues grew 3.9 percent in August.
- Corporation income tax and Limited Liability Entity tax collections were just $4.8 million for the month. Year-to-date receipts have decreased 22.2 percent.
- Cigarette taxes fell 14.3 percent for the month and have declined 6.4 percent for the year.
- Property taxes rose $3.8 million, or 24.9 percent in August and have increased 31.2 percent for the fiscal year. Nearly all collections are from tangible property. Large swings in receipts are not unusual early in a fiscal year for this account.
- Coal severance tax collections in August fell 29.3 percent to $4.1 million and are down 33.0 percent through the first two months of the fiscal year.
- Lottery revenues were unchanged at $19.5 million in August and are unchanged through the first two months of FY21.
Road Fund revenue fell 1.0 percent in August with revenues of $140.8 million but have increased 2.9 percent for the first two months of the fiscal year.
Motor vehicle usage tax collections rose 10.8 percent while motor fuels revenues fell 4.5 percent.
The official Road Fund revenue estimate calls for a 3.5 percent increase in receipts for FY21. Based on year-to-date collections, revenues must increase 3.6 percent for the remainder of the fiscal year to meet the estimate.
Among the accounts:
- Motor fuels fell 4.5 percent in August and have decreased 2.9 percent for the year.
- Motor vehicle usage collections grew 10.8 percent for the month and have grown 11.3 percent for the first two months of the fiscal year.
- License and privilege tax fell 9.5 percent, led mostly be a decline in the weight distance tax of 18.1 percent.