FRANKFORT, Ky. — State Budget Director John Hicks reported today that General Fund receipts climbed 2.9% in February with revenues of $884.0 million compared to the $859.4 million collected in February 2019. Through the first eight months of FY20, the General Fund has grown 3.5%.
The official General Fund revenue estimate for FY20 calls for revenue to grow 1.6% compared to FY19 actual receipts. After February’s results are considered, General Fund revenues could decrease 1.9% for the remainder of the fiscal year and still meet the official estimate.
Director Hicks was cautiously optimistic regarding February’s growth, but noted that the remainder of the fiscal year still contains challenges to meeting the official estimate.
“February receipts were propelled in large part by our largest two taxes, the individual income tax and the sales tax,” said Hicks. “The withholding component of the individual income tax grew 7.5% while posting the single highest month of nominal collections with $514.9 million in receipts. Sales tax collections were also higher in February, growing 5.2% for the month and 6.9% through the first eight months of FY20. Corporation income taxes have been surprisingly down year to-date, a decline of 23%. The Commonwealth is entering a stretch where General Fund receipts grew 8.8% during the last four months of FY19. Achieving growth this fiscal year may be hindered by the high collections achieved in March, April, and May of 2019. Year-to-date receipts are certainly encouraging, but we are mindful of the challenges that lie ahead for the remainder of the fiscal year.”
Among the major General Fund accounts:
- Individual income taxes grew 5% in February and withholding receipts grew 7.5%. Net refunds were approximately $12.7 million higher than were issued in FY20 compared to FY19. Year-to-date collections for the individual income tax are up 3.7%.
- Sales tax revenues grew 5.2% in February following a strong holiday season of growth. Sales tax collections have increased 6.9% through the first eight months of FY20, compared to projected growth of 6.5%.
- Corporation income tax receipts fell $5.3 million in February and have now fallen 23.8% year-to-date.
- The limited liability entity tax (LLET) fell 39.4% in February, but has risen 18.3% thus far in FY20.
- Cigarette taxes plunged 16.7% in February and are down 2.8% through the first eight months of the fiscal year.
- Property taxes grew 8.9% in February and are up 2.1% for the year. The public service property tax account has remained negative for most of FY20, offsetting solid growth in the real and tangible personal property accounts.
- Coal severance tax receipts fell 36.8% for the month. Year-to-date collections are down 23.1%.
- Lottery dividend payments went up 2.5% and are 10.0% higher for the year.
Road Fund receipts grew 3.8% in February with collections of $128.3 million. Year-to-date collections have grown 1.8% compared to last year’s total. The official Road Fund revenue estimate calls for an increase of 0.4% for the entire FY20. Based on year-to-date collections, revenues can fall 2.1% for the remainder of the fiscal year to meet that estimate.
Among the Road Fund accounts:
- Motor fuels receipts grew 2.4% in February and are 0.8% higher for the year.
- Motor vehicle usage collections increased 7.7% for the month. Year-to-date collections are up 6.0% compared to the projected growth of 3.5%.
- License and privilege receipts fell 2.5% in February. Year-to-date receipts in these accounts have fallen 4.7% after robust collections in FY19.
- Nontax receipts climbed sharply in February and have grown 8.1% for the year.
Additional information is available at https://osbd.ky.gov/Pages/default.aspx.