FRANKFORT, Ky. (March 9, 2018) – The Office of State Budget Director reported today that February’s net General Fund receipts rose 11.8 percent compared to February of last year, an increase of $84.0 million. Total revenues for the month were $793.0 million, compared to $709.0 million during February 2017. Receipts have now grown 4.6 percent for the first eight months of FY18.
The official CFG estimate calls for 2.3 percent revenue growth for the entire fiscal year. To meet the official revenue estimate, receipts can fall 2.1 percent over the last four months of the fiscal year.
State Budget Director John Chilton noted that nearly all of the increase in February collections was a result of a timing issue in the issuance of individual income tax refunds.
“Each year during the months of February through April, receipts are somewhat volatile due to variations in the timing of the processing of income tax refunds. The Department of Revenue’s enhanced fraud detection initiative has resulted in a slight delay in the issuance of 2018 refunds . The result of this action means that February collections are artificially high. When the catch-up refunds are issued in March, we expect to see a concomitant decline in individual income tax receipts. If refunds in 2018 went out at the 2017 level, the February’s total General Fund receipts would have actually fallen by $7.0 million.”
Among the major accounts:
- Sales and use tax receipts increased 5.3 percent for the month and have grown 3.1 percent year-to-date. After declining 1.3 percent in the first two months of the year, collections in this account have increased 4.7 percent.
- Corporation income tax receipts decreased $18.5 million in February as both declarations and net returns fell. For the year, revenues have fallen 3.8 percent.
- Individual income tax collections grew 28.0 percent, $88.9 million, in February. Collections have grown 7.8 percent though the first eight months of FY18. Net returns were up $91.2 million for the month, which offset declines in both withholding and estimated payments. As noted above, the unusual growth in net individual income tax receipts is attributable to an administrative delay in the issuance of taxpayer refunds.
- Property tax collections grew 1.3 percent for the month and have increased 3.8 percent year-to-date.
- Cigarette tax receipts fell 1.5 percent for the month and have decreased 4.4 percent year-to-date.
- Coal severance tax receipts decreased 7.3 percent in February and are down 8.1 percent through the first eight months of the fiscal year.
Road Fund receipts declined 7.8 percent in February as collections totaled $110.9 million. Total revenue has fallen 1.5 percent through the first eight months of FY18. Like the General Fund, Road Fund revenues were also impacted by a timing issue. Approximately $11.0 million of February motor fuels receipts were processed in March rather than February. Had that money been processed in February, motor fuels receipts would have increased 2.0 percent. Motor fuels and motor vehicle usage tax receipts both posted declines for the month and offset gains in license and privilege, and nontax receipts. The official Road Fund revenue estimate calls for revenues to decline 0.3 percent for the fiscal year. Based on year-to-date tax collections, revenues must increase 1.9 percent for the remainder of FY18 to meet the official estimate. Among the accounts, motor fuels fell 17.5 percent. Motor vehicle usage revenue decreased 3.4 percent, and license and privilege receipts rose 7.1 percent.