FRANKFORT, Ky. — General Fund receipts for July, the first month of Fiscal Year 2024 (FY24), totaled $1,153.3 million, a 7.1 percent increase compared to July 2022 receipts. All the major taxes: individual income, sales, business, and property, grew over last year, with a surprising rise in individual income tax collections after a 10 percent tax rate reduction.
The revised official revenue estimate for FY24, which was increased by $967 million after the FY24 budget was originally enacted, calls for revenue to decline by 0.2 percent compared to FY23 actual receipts. Therefore, receipts can decline 0.8 percent over the remaining eleven months of the fiscal year and still meet the revenue estimate. The official revenue estimates for the General Fund and the Road Fund will be revised later this fall in anticipation of the 2024 Regular Session when the 2024-2026 biennial budget is considered.
Among the major accounts:
- Individual income tax receipts grew 4.4 percent on the strength of withholding and net returns. Impacted by the 10 percent tax rate reduction, withholding declined by only 6.6 percent over the last four months, leading to July’s increase of 3.2 percent.
- Sales tax revenues grew 5.3 percent to $522.4 million, marking just the fourth time collections in this account have exceeded $500 million.
- Major business tax receipts grew 23.8 percent, or $8.4 million, as corporation income tax receipts increased while LLET collections declined.
- Cigarette tax collections fell 14.0 percent for the month to $21.1 million.
- Property tax receipts rose 25.5 percent due to timing issues with the omitted and delinquent collections. Early in the year, it is common to see large percentage changes in property tax collections because of the collection schedule.
- Coal severance tax revenues grew 1.0 percent to $7.8 million.
- Lottery revenues increased 4.3 percent to $24.5 million.
- Income on investments increased $17.9 million over July 2022 collections. Receipts of $21.1 million are the second-largest monthly total ever.
Road Fund revenues for July totaled $142.9 million, a 3.8 percent increase compared to last July. The official Road Fund revenue estimate for FY24 calls for revenue to decline by 4.1 percent compared to FY23 actual receipts. Based on the first month’s receipts, revenues can decline by 4.8 percent for the rest of the fiscal year and still meet the official estimate. Motor fuels tax receipts are expected to grow further, starting with August receipts, due to a 2.1 cents tax rate increase that went into effect July 1.
Among the major Road Fund categories:
- Motor fuels tax receipts grew 5.5 percent.
- Motor vehicle usage tax rose 2.4 percent.
- License and privilege taxes increased by 0.2 percent to $17.9 million.
