GENERAL FUND AND ROAD FUND RECEIPTS FOR DECEMBER 2018
State Budget Director John Chilton reported today that General Fund receipts fell 0.8 percent in December with revenues of $1,131.1 million. December’s receipts declined marginally compared to the $1,140.0 million collected in December 2017. Through the first half of the fiscal year (FY19), the General Fund has grown 3.7 percent.
The official General Fund revenue estimate for FY19 calls for revenue to grow 3.3 percent compared to FY18 actual receipts. Based on December’s results, General Fund revenues must increase 3.0 percent for the remainder of the fiscal year to meet the official estimate.
Despite the slight decline in General Fund receipts in December, Chilton remained positive in his assessment of December’s activity. “Sales and use taxes grew by 10.5 percent in December, reaching double-digit growth for the second consecutive months. This surge in consumption taxes is directly attributable to the expansion of the sales tax base and our ongoing efforts to capture a higher percentage of online sales. December’s decline in General Fund receipts is primarily due to weakness in individual income tax receipts. The monthly setback was anticipated due to a one-time spike in estimated tax payments in December 2017, where taxpayers were accelerating state income tax payments in response to the Federal changes limiting the deductibility of state taxes beginning in 2018. The income tax grew 14.2 percent in December 2017, fueling General Fund growth of 11.2 percent for the month. December 2017 was the highest month of General Fund receipts on record, thus created a tremendous challenge for growth in December 2018. Despite the slight decline in December 2018, we are pleased at the pace of General Fund revenue collections received thus far in FY19.”
Among the major General Fund accounts:
- Individual income taxes fell 8.7 percent in December. Year-to-date collections are down 2.3 percent. Earlier in 2018, the top corporate and individual income tax rates were decreased from 6.0 percent to 5.0 percent.
- Sales tax revenues grew 10.5 percent in December, partially attributable to the October 1st implementation of sales tax collections on internet sales made possible by the U.S. Supreme Court’s Wayfair decision. Sales tax collections have increased 8.6 percent in the first half of the year, roughly congruous with the projections for FY19.
- Corporation income tax receipts increased $10.1 million in December and have now increased 4.9 percent so far in FY19.
- The Limited Liability Entity Tax (LLET) declined $20.0 million, thus negating the increase in corporation income taxes. The combination of corporate income taxes and the LLET has shown a 3.7 percent decline through the first half of FY19.
- Cigarette taxes are up 35.6 percent for the month and have grown 66.8 percent for the first half of the fiscal year. The increase coincides with the 83.3 percent increase in the cigarette tax from $0.60 per pack to $1.10 per HB 487.
- Property taxes grew 5.6 percent in December and are up 3.6 percent for the year.
- Coal severance tax receipts fell 5.8 percent for the month. Year-to-date collections are down 14.7 percent.
- Lottery revenues increased 2.4 percent in December and are up 5.3 percent for the year.
Road Fund receipts grew 3.5 percent in December with collections of $117.1 million. Year-to-date collections have grown 4.3 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 eight of the past ten 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 4.7 percent for the remainder of the fiscal year to meet that estimate.
Among the Road Fund accounts:
- Motor fuels receipts climbed 1.8 percent in December and 1.9 percent for the year.
- Motor vehicle usage collections rose 5.7 percent for the month. Year-to-date collections are up 5.6 percent.
- License and privilege fees fell by 9.9 percent in December following strong growth in the prior two months. For the first half of the fiscal year, receipts are up 6.1 percent.
- Nontax receipts rose sharply in December and have grown 42.3 percent for the year.
Additional information is available here:http://www.osbd.ky.gov