State general, road fund revenues continue to increase
FRANKFORT, Ky. (WTVQ) – State Budget Director John Hicks reported Friday that General Fund receipts increased 12.5 percent in August compared to last year.
Total revenues for the month were $937.7 million, compared to $833.8 million during August 2020. Through the first two months — July and August — of the budget year that began July 1, General Fund receipts have increased 10.4 percent.
The official revenue estimate for FY22 calls for General Fund revenues to fall 7.7 percent compared to FY21 actual receipts.
Based on August results, receipts can decline by 10.6 percent for the remainder of the fiscal year and still meet the official estimate. The Consensus Forecasting Group met in August to begin the process of revising the FY22 estimate and forecasting revenues for the upcoming biennium.
Road Fund receipts for August totaled $148.3 million, an increase of 5.3 percent from August 2020 levels. Through the first two months of the fiscal year, collections in this fund have increased 2.8 percent.
Hicks highlighted the similarities between the General Fund performance through the first two months in FY22 and the annual patterns seen in FY21.
“All three of the largest revenue sources for the General Fund continue to perform well into FY22, paving the way for solid growth in overall tax receipts. Individual income collections grew by 10.3 percent, reflecting resilience in the underlying economy. Major business taxes continued the high growth seen in FY21 by posting an increase of nearly $12 million in August. The consumption sector of the Kentucky economy also exhibited vigor in August, as witnessed by the 11.7 percent growth in the sales and use tax. While challenges exist in the upcoming months, the broadly based growth of 10.4 percent through the first two months of FY22 suggests that the level of revenue collections in FY21 was not an aberration, but rather a sign that the Kentucky economy in FY22 continues to rebound from the recession of 2020,” Hicks said.
Among the major accounts:
- Individual income tax collections rose 10.3 percent as the three main components of the tax all increased. Withholding receipts improved by $27.6 million compared to last August.
- Sales tax revenues grew 11.7 percent in August and are up 9.4 percent through the first two months of the fiscal year. The sales tax has posted growth in 13 of the last 14 months since the end of the recession in 2020.
- Corporation income tax and LLET collections grew 245.2 percent for the month, an increase of $11.9 million compared to prior year totals. Year-to-date receipts in these accounts have increased 207.3 percent, or $45.8 million.
- Cigarette tax receipts rose 17.0 percent for the month but have declined 6.7 percent for the year.
- Property tax receipts rose 16.3 percent in August and have increased 8.0 percent for the fiscal year. Large swings in receipts are not unusual early in a fiscal year for the property tax accounts.
- Coal severance tax collections in August fell 15.5 percent to $3.5 million but are up 15.3 percent through the first two months of the fiscal year.
- Lottery dividends rose 15.4 percent to $22.5 million in August and are up 15.6 percent through the first two months of FY21.
Road Fund revenue grew 5.3 percent in August with revenues of $148.3 million and have increased 2.8 percent for the first two months of the fiscal year.
Motor vehicle usage tax collections rose 5.8 percent while motor fuels revenues grew 3.3 percent. The official Road Fund revenue estimate calls for a 2.0 percent decrease in receipts for FY22. Based on year-to-date collections, revenues can decrease 3.0 percent for the remainder of the fiscal year and still meet the estimate.
Among the accounts:
- Motor fuels rose 3.3 percent in August and have increased 4.4 percent for the year.
- Motor vehicle usage collections grew 5.8 percent for the month and have grown 3.4 percent for the first two months of the fiscal year.
- License and privilege tax grew 12.5 percent in August but are down 3.3 percent year-to-date.