Decrease of $19.3 million
FRANKFORT, Ky. (Feb. 10, 2017) — The Office of State Budget Director reported today that January’s General Fund receipts fell 2.1 percent compared to January of last year, a decrease of $19.3 million. Total revenues for the month were $884.6 million, compared to $903.9 million during January 2016. Receipts have now grown 2.5 percent for the first seven months of Fiscal Year 2017 (FY17).
The official FY17 revenue estimate calls for 2.7 percent growth in revenues for the entire fiscal year. Meeting the official estimate requires 2.9 percent growth for the last five months of the fiscal year.
While General Fund tax receipts declined in the month, the revenue outlook still calls for a year-end balance less than, but very close to, the budgeted level, said State Budget Director John Chilton.
“The January receipts showed resilience in the income tax with withholding payments increasing by 11.5 percent compared to last year,” he said. “However, sales and use tax receipts declined by 3.7 percent, largely because a large number of refunds were issued to taxpayers. With overall year-to-date General Fund revenue growth of 2.5 percent, General Fund revenues will need to increase to 2.9 percent for the remainder of the fiscal year to meet official estimates.”
“Looking forward, the Governor’s Office for Economic Analysis projects growth for the current quarter to be modest compared to the extraordinary 7.2 percent growth recorded in the third fiscal quarter in FY16,” he said. “The needed acceleration in growth could arise in the fourth fiscal quarter, as prior year growth was only 0.6 percent.”
Among the major General Fund accounts:
- Individual income tax collections grew 3.0 percent for the month and are up 4.1 percent through the first seven months of FY17. Withholding receipts continue to be strong with growth of 11.5 percent in January and 4.9 percent for the year.
- Sales and use tax receipts decreased 3.7 percent for the month but are up 0.9 percent fiscal year-to date.
- Corporation income tax receipts fell $6.7 million but have increased 15.7 percent in the first seven months of the fiscal year.
- Property tax collections grew 0.9 percent in January and have increased 3.2 percent fiscal year-to-date.
- Cigarette tax receipts decreased 13.6 percent for the month and have decreased 4.8 percent fiscal year-to-date.
- Coal severance tax receipts grew 0.7 percent in January. However, collections are down 27.3 percent through the first seven months of the fiscal year.
Compared to last year, Road Fund receipts increased 14.2 percent in January to $125.7 million. Fiscal year-to-date collections now stand at 1.9 percent compared to the first seven months last year. Collections for the month were $125.7 million and were bolstered by a large increase in motor vehicle usage tax receipts.
The official Road Fund estimate calls for revenues to decline 1.7 percent for the fiscal year. Based on year-to-date tax collections, revenues can fall 6.6 percent for the remainder of the fiscal year and still hit the official forecast for the entire fiscal year.
Among the accounts, motor fuels rose 0.9 percent, motor vehicle usage revenue increased 38.1 percent, and license and privilege receipts grew 16.2 percent.