FRANKFORT, Ky. — State Budget Director John Chilton reported today that General Fund receipts fell 1.2% in September with revenues of $1,064.5 million. This compares to $1,077.3 million collected in September 2018. So far this fiscal year (FY20), General Fund receipts have grown 1.1%. September closes out the first quarter of the fiscal year and collections declined for the first time since the third quarter of FY17 when receipts fell 3.2%. For perspective, increases in collections have averaged 4.0% in the intervening nine quarters.
The official General Fund revenue estimate for FY20 calls for revenue to grow 0.6% compared to FY19 actual receipts. Based on September’s results, General Fund revenues must increase 0.5% for the remainder of the fiscal year to meet the official estimate.
Chilton noted that a good month from the sales tax helped offset reductions in nearly every other major account.
“After two months of growth to start FY20, General Fund receipts declined in September as most major accounts showed weakness,” Chilton said. “For calendar-year income tax filers, September is a month when estimated payments are due. These estimated payments fell for both individuals and corporations compared to September of 2018, leading to overall reductions in collections of both categories of income taxes. Sales and use tax receipts partially offset these reductions. In fact, the sales and use tax has declined only once since September 2017 and has increased steadily for the last 16 months, primarily attributable to the expansion of the tax base into selected services and admissions effective July 1, 2018. The state Consensus Forecasting Group will deliberate on the latest economic and revenue data when it convenes later in October to issue preliminary revenue estimates that will be used for budget purposes in the upcoming biennium.”
Among the major accounts:
- Individual income taxes fell 0.1% in September as a gain in withholding nearly offset declines in net returns and declarations. Year-to-date collections in this account have grown 1.6%.
- Sales tax revenues grew 6.2% in September as the effects of legislation continue to be felt. Collections have increased 7.8% in the first three months of the year.
- Corporation income tax and LLET tax receipts fell 6.0% for the month and have declined 10.5% in the first quarter of the fiscal year. The impact of legislative action can also be seen in this account as the estimated impact for FY20 is a reduction of $75 million in tax receipts.
- Cigarette taxes declined 10.6% in September but are still up 0.1% for the first three months of the fiscal year.
- Property taxes grew 0.8% in September but are down 9.8% for the year.
- Coal severance tax receipts fell 5.1% for the month. Year-to-date collections are down 11.9%.
- Lottery revenues rose 2.6% in September and are up 3.5% for the year.
Road Fund receipts grew 3.8% in September with collections of $131.1 million. Year-to-date collections have grown 1.1% compared to last year’s total. The official Road Fund revenue estimate calls for a 3.6% decrease in receipts for the entire fiscal year (FY20). Based on year-to-date collections, revenues can fall 5.2% for the remainder of the fiscal year and still meet the estimate.
Among the accounts:
- Motor fuels receipts rose 0.8% in September and have grown 0.8% for the year.
- Motor vehicle usage collections rose 6.5% for the month. Year-to-date collections are up 5.9%. The usage tax is essentially a sales tax that applies commensurate with the purchase of new or used autos and trucks.
- License and privilege taxes grew 1.9% in September. For the first three months of the fiscal year, receipts have declined 11.6%.
- Nontax receipts increased $700,000 in September and have grown 9.6% for the year.