State Budget Director John Chilton reported today that General Fund receipts rose 3.5 percent in October with revenues of $826.0 million. This compares to $798.4 million collected in October 2017. Through the four months of the fiscal year (FY19), the General Fund has grown 4.2 percent.
The official General Fund revenue estimate for FY19 calls for revenue to grow 3.3 percent compared to FY18 actual receipts. Based on October’s results, General Fund revenues must increase 2.9 percent for the remainder of the fiscal year to meet the official estimate.
Chilton observed that the October activity continued to follow the path predicted by the tax reform efforts in 2018, albeit colored by some notable timing differences. “Sales and gross receipts taxes grew by 8.4 percent in October, largely aided by the timing of an $8.5 million gain in insurance premiums taxes and a $11.4 million gain in the cigarette tax which is attributable to the tax law change. The sales and use tax increased by only 3.3 percent compared to October 2017, but growth was muted due to substantial refund activity. Meanwhile, the individual income tax showed continued weakness with a 1.0 percent setback in October due to the rate reductions embodied in the tax reform measure, HB 487. Taken in aggregate, October’s revenue collections were consistent with the latest Governor’s Office for Economic Analysis estimates that were released on October 30, predicting that FY19 receipts will nearly equal the offical budgeted estimate as General Fund growth becomes more parsimonious in the coming quarters.”
Among the major General Fund accounts:
Individual income taxes fell 1.0 percent in October as a 3.0 percent decline in withholding overwhelmed gains net returns and estimated tax payments. Year-to-date collections are down 0.7 percent. This is consistent with the reduction in tax rates in HB 487.
Sales tax revenues grew 3.3 percent in October, partially encumbered by $10 million in refunds attributable to tax increment financing agreements. Collections have increased 7.0 percent in the first four months of the year.
Corporation income tax receipts increased $5.2 million in Ocotber but have declined 1.6 percent so far in FY19.
Cigarette taxes are up 71.2 percent for the month and have grown 66.2 percent for the first four months of the fiscal year. The increase coincides with the July 1 83.3 percent increase in the cigarette tax from $0.60 per pack to $1.10 per HB 487.
Property taxes grew 61.5 percent in October, up 4.7 percent for the year.
Coal severance tax receipts fell 9.5 percent for the month. Year-to-date collections are down 18.4 percent.
Lottery revenues increased 2.5 percent in October and are up 2.7 percent for the year.
Road Fund receipts grew 3.4 percent in October with collections of $123.7 million. Year-to-date collections have grown 3.7 percent compared to last year’s total. Despite declines in Road Fund revenue in FY15 and FY16, followed by anemic growth in FY17 and FY18, receipts have now risen in six of the past eight months. The official Road Fund revenue estimate calls for a 0.3 percent decrease in receipts for the entire fiscal year (FY19). Based on year-to-date collections, revenues can fall 2.3 percent for the remainder of the fiscal year to meet the estimate.
Among the Road Fund accounts:
Motor fuels receipts dipped 1.6 percent in September but have grown 0.6 percent for the year.
Motor vehicle usage collections rose 10.0 percent for the month. Year-to-date collections are up 6.2 percent.
License and privilege taxes rebounded from a weak September to post 5.9 percent growth in October. For the first four months of the fiscal year, receipts are up 5.9 percent.
Nontax receipts increased marginally in October but have grown 42.8 percent for the year.
Additional information is available here https://osbd.ky.gov/Pages/default.aspx