GENERAL FUND AND ROAD FUND RECEIPTS FOR FEBRUARY 2019
State Budget Director John Chilton reported today that General Fund receipts climbed 8.4 percent in February with revenues of $859.4 million. February’s receipts compare favorably to the $793.0 million collected in February 2018. Through the first eight months of FY19, the General Fund has grown 3.2 percent.
The official General Fund revenue estimate for FY19 calls for revenue to grow 3.3 percent compared to FY18 actual receipts. After February’s results are considered, General Fund revenues must increase 3.5 percent for the remainder of the fiscal year to meet the official estimate.
Following declines in General Fund receipts in December and January, Chilton was cautiously optimistic regarding the positive reversal of fortune in February. “The pattern for FY19 has been healthy growth in the sales tax and cigarette taxes due to the passage of HB 487 in 2018. February saw both taxes keeping pace as the sales tax grew 7.1 percent and cigarette taxes grew 72.2 percent.
“Unlike prior months, however, the individual income tax grew by 9.0 percent despite the rate reduction in HB 487. A deeper look into that tax shows that refunds were down $36.6 million compared to last year, likely attributable to the timing of refund requests rather than an increase in actual tax collections. Thus, the 9.0 percent surge in the individual income tax is unlikely to repeat during the remainder of the refund season.
“One other bright spot in the month was the coal severance tax, which eclipsed $10.0 million for the month for the first time since December 2015.Despite the nonrecurring nature of the increase in net income tax collections, February was a good month for General Fund growth. With just four months remaining in the fiscal year, we are once again running very close to the official revenue estimate for FY19.”
Among the major General Fund accounts:
Individual income taxes grew 9.0 percent in February. Year-to-date collections are down 3.2 percent. In 2018, the top corporate and individual income tax rates were decreased from 6.0 percent to 5.0 percent.
Sales tax revenues grew 7.1 percent in February following a very strong holiday season of growth. Sales tax collections have increased 8.6 percent through the first eight months of FY19, roughly equal to the official projections. In 2018, the sales tax was expanded to include many services that were not previously subject to tax.
Corporation income tax receipts fell $13.4 million in February and have now fallen 2.9 percent so far in FY19.
The Limited Liability Entity Tax (LLET) grew 43.1 percent but has now dropped 17.9 percent thus far in FY19.
Cigarette taxes were up 72.2 percent for the month and have grown 71.5 percent for the first eight months of the fiscal year. The revenue 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 0.2 percent in January and are up 3.8 percent for the year.
Coal severance tax receipts grew 24 percent for the month. Year-to-date collections are down 9.7 percent.
Lottery revenues were equal to last year’s dividend payment but are up 3.9 percent for the year.
Road Fund receipts grew 11.5 percent in February with collections of $123.6 million. Year-to-date collections have grown 4.9 percent compared to last year’s total. Road Fund receipts have now risen in ten of the past twelve months. The official Road Fund revenue estimate calls for a 0.3 percent decrease in receipts for the entire FY19. Based on year-to-date collections, revenues can fall 9.7 percent for the remainder of the fiscal year to meet that estimate.
Among the Road Fund accounts:
Motor fuels receipts grew 25.1 percent in February due to an unusually small base in February 2018. Look for the fuels account to fall sharply in March due to the timing issue that occurred in 2018.
Motor vehicle usage collections increased 1.5 percent for the month. Year-to-date collections are up 4.9 percent.
License and privilege rose 0.2 percent in February. Year-to-date growth is a healthy 6.0 percent.
Nontax receipts climbed sharply in February and have grown 36.8 percent for the year.