FRANKFORT, Ky. — The Office of State Budget Director reported today that February’s General Fund receipts rose 4.7 percent compared to February of last year. Collections for the month were $967.5 million. February collections are the largest February total on record. Receipts have now grown 14.2 percent in the first eight months of FY22.
The official CFG estimate calls for 7.5 percent revenue growth for the entire fiscal year. To meet the official revenue estimate, receipts can fall 3.8 percent over the last four months of the fiscal year.
State Budget Director John Hicks noted that the withholding component of the individual income tax, in particular, continues to show strength, indicating wage and employment growth in Kentucky. “Withholding collections rose 11.0 percent in February and have grown by double-digit percentages in four of the last five months. The strength in withholding is a direct result of growing wage and employment growth. Year-to-date growth in withholding is 8.8 percent. Employment and wage growth provides Kentucky households with the resources to purchase goods and services, as indicated by the 12.6 percent surge in the sales and use tax through the first eight months of the fiscal year. All of the major tax categories posted growth in February.”
Among the major accounts:
- Sales and use tax receipts increased 4.1 percent for the month and have grown 12.6 percent year-to-date.
- Combined corporation income and limited liability entity tax (LLET) tax receipts increased $7.8 million compared to February 2021 with collections of $2.7 million. For the year, combined revenues have increased 49.6 percent.
- Individual income tax collections rose 5.9 percent in February due primarily to an 11.9 percent increase in withholding. Net tax refunds were $32.9 million more than last February. Collections have grown 8.8 percent through the first eight months of the year.
- Property tax collections grew 16.4 percent for the month and have increased 4.3 percent year-to-date.
- Cigarette tax receipts fell 28.7 percent for the month and have decreased 7.6 percent year-to-date.
- Coal severance tax receipts rose 5.8 percent in February and have increased 8.8 percent through the first eight months of the fiscal year.
Road Fund receipts grew 4.5 percent in February as collections totaled $131.4 million. Total revenue has grown 3.4 percent through the first eight months of FY22. Motor fuels collections were essentially flat, presumably due to the increase in pump prices. Motor vehicle usage tax receipts from the sale of vehicles had their largest percent increase of the fiscal year, 16.7 percent. The official Road Fund revenue estimate call for revenues to increase 2.3 percent for the fiscal year. Based on year-to-date tax collections, revenues must increase 0.3 percent for the remaining four months of the year to meet the official estimate.