State Budget Director John Chilton reported today that General Fund receipts increased 3.6 percent in August compared to last year. Total revenues for the month were $787.2 million, compared to $759.9 million during August 2018. For the first two months of this fiscal year (FY20), General Fund receipts have increased 2.7 percent.
Chilton noted that the rate of growth of General Fund receipts has moderated from FY19 levels. “We saw rapid growth in General Fund receipts last fiscal year. Some of the increase was due to a solid economy but the tax package passed by the General Assembly in the 2018 Legislative Session also played a large role in the rise in collections. In the current fiscal year, the effects of the 2018 tax law changes have mostly worked their way through the system, so we expect to see lower growth in accounts such as the cigarette taxes. On the other hand, collections from the income taxes should begin to stabilize and grow. Growth in the individual income tax, for example, is starting to rebound now that the rate reduction has had a full year to work into the historical data. All of these developments will be incorporated into the deliberations this fall as the Consensus Forecasting Group develops the official budget estimates for the 2020-2022 biennium.”
The official revenue estimate for FY20 calls for revenue to increase 0.6 percent compared to FY19 actual receipts. Based on August results, General Fund revenues need to grow 0.3 percent for the remaining ten months of the fiscal year to meet the official estimate.
Among the major accounts:
- Individual income taxes rose 6.4 percent on the strength of withholding collections which were up 6.3 percent.
- Sales tax revenues grew 6.4 percent in August and are up 8.6 percent through the first two months of the fiscal year.
- Corporation income tax collections were negative for the month as the additional tax due with filed returns were $8.4 million below prior year levels. Year-to-date receipts in this account have decreased 35.1 percent.
- Cigarette taxes fell 0.4 percent for the month.
- Property taxes declined 12.2 percent in August and have fallen 16.3 percent for the fiscal year. Large swings in receipts are not unusual early in a fiscal year for this account since significant receipts from property taxes do not occur until later in the year.
- Coal severance tax collections in August fell 25.4 percent to $5.8 million and are down 15.6 percent through the first two months of the fiscal year.
- Lottery revenues grew 2.6 percent in August and have increased 4.1 percent through the first two months of FY20.
Road Fund revenue fell 0.7 percent in August with revenues of $142.3 million and have decreased 0.2 percent for the first two months of the fiscal year. Motor vehicle usage tax collections rose 0.8 percent while motor fuels revenues increased 4.0. The official Road Fund revenue estimate calls for a 3.6 percent decrease in receipts for the FY20. Based on year-to-date collections, revenues can decline 4.3 percent for the remainder of the fiscal year to meet the estimate.
Among the accounts:
- Motor fuels rose 4.0 percent in August and have increased 0.8 percent for the year.
- Motor vehicle usage collections grew 0.8 percent for the month and have grown 5.5 percent for the first two months of the fiscal year.
- License and privilege tax fell 16.9 percent.