The Office of State Budget Director reported today that May’s General Fund receipts fell 1.8 percent compared to May of last year, a decrease of $14.2 million. Total revenues for the month were $763.1 million, compared to $777.3 million received during May 2014. Receipts have now grown 5.4 percent for the first 11 months of FY15.
The enacted budget calls for 3.6 percent revenue growth for the entire fiscal year. With receipts through May, June collections can fall $121.9 million or 12.5 percent from June 2014 receipts to meet budgeted levels.
State Budget Director Jane C. Driskell noted a small decline in May receipts was expected. She also reemphasized that the last quarter of almost every fiscal year typically contains some timing issues, especially in the income taxes, that create variability in monthly growth rates.
“In April we reported General Fund revenue growth of $193.4 million,” Driskell said. “We recognized that a portion of the April increase was probably due to an acceleration of monthly collections, so a slow-down in May was likely — especially in the individual income tax. The individual income tax fell by 5.7 percent in May, but a combined April and May increased 17.8 percent. For the year, individual income tax receipts have grown by 9.6 percent.”
“The strength of Kentucky’s economy was demonstrated in growth of withholding, or payroll, receipts, the largest component of the individual income tax receipts,” Driskell continued. “April’s growth of 12.3 percent was followed by May’s growth of 14.2 percent. Payroll taxes are a very good proxy for the underlying economy, so we remain confident that we will exceed the FY15 official estimate and begin FY16 with continued positive momentum.”
Among the major accounts:
• Individual income tax collections fell 5.7 percent in May due to the timing issue highlighted above. Receipts have grown 9.6 percent though the first 11 months of FY15.
• Sales and use tax receipts increased 2.6 percent for the month and have grown 4.2 percent year-to-date.
• Corporation income tax receipts grew by $6.3 million and have grown 3.6 percent for the year.
• Property tax collections decreased 10.0 percent in May but have grown 0.4 percent year-to-date.
• Cigarette tax receipts declined 3.3 percent in May and have fallen 2.4 percent year-to-date.
• Coal severance tax receipts fell 17.2 percent in May and have fallen 8.2 percent through the first 11 months of the fiscal year.
Road Fund receipts fell 4.1 percent in May 2015 with collections of $126.0 million. Year-to-date collections have fallen 1.5 percent. The official Road Fund revenue estimate calls for a decrease in revenues of 0.9 percent for the fiscal year. Based on year-to-date tax collections, revenues must grow 5.6 percent in June to meet the estimate.
The most recent internal revenue estimate predicted a Road Fund revenue shortfall of $11 million for the fiscal year that ends June 30. Among the accounts, motor fuels receipts fell 16.8 percent. Motor vehicle usage revenue increased 2.6 percent, and license and privilege receipts grew 14.6 percent.
From the Office of State Budget Director