State revenues hold their own against estimates
FRANKFORT, Ky. (WTVQ) – Despite the pandemic, state general and road fund revenues continue to hold their own with general fund receipts up 4.8 percent in September with revenues of $1,115.4 million, state Budget Director John Hicks reported Friday.
The total compares to $1,064.5 million collected in September 2019.
So far this fiscal year which began July 1 and runs through June 30, 2021, the General Fund has grown 5.8 percent. September closes out the first quarter of the fiscal year and collections have rebounded from the fourth quarter of FY20 in which collections fell 4.5 percent due to the effects of COVID-19.
The official General Fund revenue estimate for FY21 calls for revenue to grow 0.3 percent compared to FY20 actual receipts. Based on Septembers results, General Fund revenues can decline 1.4 percent for the remainder of the fiscal year and still meet the official estimate, Hicks said.
Road Fund receipts for September totaled $131.1 million and were unchanged from September 2019 levels. For the first three months of the fiscal year, collections have risen 1.9 percent.
Like the General Fund, receipts in the first quarter represent a significant improvement from the previous quarter in which Road Fund revenues fell 23.6 percent.
Hicks noted that September’s General Fund revenue growth was broadly based, led by strength in sales taxes.
The sales tax grew each month of the first quarter of FY21 after three months of declines as consumption-based taxes continue to outperform expectations.
Withholding collections were 2.2 percent higher in September, up 5.6 percent in the first quarter, and were just 1.9 percent higher in the quarter when excluding the impact of unemployment insurance benefits.
September revenues also include quarterly estimated tax payments, whereby individuals and corporations make their third of four advanced payments on expected tax year 2020 income tax liabilities that will come due next spring.
The individual income tax component of the estimated payments totaled $95.3 million in September, 1.4 percent lower than September 2019.
Estimated payments are down 6.4 percent for the three estimated payments for tax year 2020 to-date.
Corporate estimated payments were 4.9 percent lower with collections of $105.4 million. Both sources of revenue, while falling, exceeded earlier expectations given the presence of COVID-19.
Among the major accounts:
- Individual income taxes grew 0.7 percent in September as a gain in withholding nearly equally offset declines in net returns and declarations. Year-to-date collections in the individual income tax have grown 4.5 percent.
- Sales tax revenues grew 4.5 percent in September and have increased 7.0 percent in the first three months of the year.
- Corporation income and Limited Liability Entity Tax (LLET) receipts fell 2.0 percent for the month and have declined 5.3 percent in the first quarter of the fiscal year.
- Insurance premium tax receipts in September were $20 million higher than last September due primarily to the early collection of revenues that normally occur in October.
- Cigarette taxes grew 3.4 percent in September but are down 3.3 percent for the first three months of the fiscal year.
- Property taxes grew 13.1 percent in September and have increased 23.5 percent for the year. Less than ten percent of the property tax receipts are collected in the first quarter of the fiscal year.
- Coal severance tax receipts fell 27.9 percent for the month. Year-to-date collections are down 31.1 percent.
- Lottery revenues rose 10.0 percent in September and are up 3.4 percent for the year.
Road Fund receipts were flat in September with collections of $131.1 million while year-to-date collections have grown 1.9 percent.
The official Road Fund revenue estimate calls for a 3.5 percent decrease in receipts for the entire fiscal year (FY21). Based on year-to-date collections, revenues must increase 4.0 percent for the remainder of the fiscal year to meet the estimate.
Among the major accounts:
- Motor fuels receipts fell 9.6 percent in September and have declined 5.3 percent for the year.
- Motor vehicle usage collections rose 13.8 percent for the month. Year-to-date collections are up 12.1 percent.
- License and privilege taxes grew 21.0 percent in September. For the first three months of the fiscal year, receipts have increased 8.4 percent.