Ky.’s April General Fund revenue breaks record
Kentucky Press News Service
FRANKFORT — The office of State Budget Director said Thursday that April’s General Fund receipts rebounded from a below par March with the largest collection month in the history of Kentucky.
Collections grew 6.3 percent compared to April of last year, an increase of $69.5 million, a news release from the budget director’s office said. Total revenues for the month were $1.165 billion, compared to $1.095 billion received during April 2017. Receipts have now grown 4.1 percent for the first 10 months of fiscal year 2018.
Four months ago, in December 2017, the Consensus Forecasting Group lowered its official estimate of FY18 receipts by $138.5 million. In response, Gov. Many Bevin issued a Budget Reduction Order that reduced spending by the amount of the shortfall. The revised revenue estimate calls for 2.3 percent revenue growth for the entire fiscal year. To meet the revised official revenue estimate, receipts can decline 6.5 percent over the last two months of the fiscal year.
Economists in the budget director’s office recently released an interim revenue estimate in which they called for revenues to grow 3.4 percent in FY18, an increase of $110.7 million compared to revised budgeted levels, thereby recovering a major portion of the fiscal year shortfall projected in December.
State Budget Director John Chilton said that while April saw a large increase in receipts, those gains could easily evaporate over the final two months of the fiscal year.
“Almost all of the increase in April tax collections came from the income taxes, corporation and individual. These accounts have historically exhibited significant fluctuations during the final quarter of the fiscal year, and the volatility this year will be amplified due to the recently enacted federal and state tax law changes. Even though receipts are in a strong position relative to levels in the revenue estimates, changes to the withholding tables could potentially erode some of the year-to-date gains,” Chilton said in the release. “Additionally, after seven months of solid growth, sales tax collections registered tepid growth of 0.3 percent in April. In summary, we are very pleased with April collections and cautiously optimistic about the path of revenue growth for the remainder of FY18 and beyond.”
Among the major accounts:
Sales and use tax receipts increased 0.3 percent for the month after growing in excess of 3 percent in each of the past seven months. Year-to-date collections have grown 3.1 percent.
Corporation income tax receipts rose 61.1 percent in April and have increased 12.3 percent for the year. Both declarations and net returns receipts increased significantly in April.
Individual income tax collections grew 4.7 percent in April and have grown 5.1 percent though the first ten months of FY18. Withholding receipts, while strong on a year-to-date basis, fell 3.8 percent in April. The remaining accounts, declarations, net returns and fiduciary, all increased for the month.
Property tax collections rose 7.5 percent and are up 3.9 percent year-to-date.
Cigarette tax receipts declined 14.1 percent in April and have fallen 5.6 percent year-to-date.
Coal severance tax receipts fell 11.8 percent and are down 11.0 percent year-to-date.
Road Fund receipts grew 8.8 percent in April on the strength of motor vehicle license collections. Revenue totaled $134.9 million for the month, $11.0 million more than last year. Year-to-date collection now stand at 0.1 percent. The official Road Fund revenue estimate call for revenues to decline 0.3 percent for the fiscal year. Based on year-to-date tax collections, revenues can fall 2.4 percent for the remainder of the year to meet the estimate.
The recently released interim revenue estimate calls for Road Fund revenues to end the year at -0.8 percent, or $7.9 million below budgeted levels. Among the accounts, motor fuel revenue fell 0.4 percent, motor vehicle usage tax collections rose 3.6 percent and license and privilege receipts increased 42.6 percent.