State Budget Director John E. Chilton reported today that General Fund receipts fell 3.9 percent in November compared to the same month last year. Total revenues for the month were $870.5 million, compared to $905.7 million during November 2014, a decrease of $35.6 million.
Receipts have now risen 2.9 percent for the first five months of the fiscal year, and can fall 0.2 percent over the projection for the final seven months of FY16 to achieve the current official revenue estimate of $10,067.2 million for FY16. November is the first monthly decline of the current fiscal year and the first monthly decline since May 2015.
The Consensus Forecasting Group, which provides the revenue estimates for the commonwealth, will convene on Dec. 16 to re-evaluate the revenue estimates for the 2016-18 biennium.
Chilton noted that two accounts largely contributed to the decline in total tax receipts.
“Individual income and property taxes combined for a decline of $42.0 million. Monthly property tax collections are historically volatile, especially during the November – January period due to variations in billing cycles.. Additionally, the decline in the individual income tax was mainly due to unusually high receipts last November, when income tax receipts grew 13.7 percent because of an additional processing day. Nothing in the economy would suggest that the 5.8 percent decline in November’s individual income tax was indicative of underlying weakness in employment or wages in Kentucky.”
Among the major accounts:
● Corporation income tax receipts increased $1.6 million in November. Receipts year-to-date have increased 3.1 percent.
● Individual income tax collections fell 5.8 percent due primarily to declines in withholding collections and balances on net returns. Through the first five months of FY16, individual income tax collections have increased 3.4 percent.
● Sales and use tax receipts increased 3.8 percent in November and have grown 6.0 percent for the year.
● Property tax collections fell 12.4 percent for the month and have fallen 3.6 percent year-to- date. Timing issues continue to affect property tax collections as public service company collections declined sharply.
● Cigarette tax receipts grew 6.5 percent in November and are up 1.9 percent for the first five months of the fiscal year. This growth may be due to higher tobacco sales in Northern Kentucky resulting from Ohio’s recent increase in tobacco taxes.
● Coal severance tax receipts declined 20.5 percent in November and are down 23.3 percent year-to-date.
● Lottery receipts fell 2.6 percent for the month but are up 2.0 percent for the year.
Road Fund receipts for November totaled $112.5 million, a 13.2 percent decrease from November 2014 levels. Year-to-date Road Fund receipts have fallen 7.2 percent. Based on collections through the first five months, Road Fund receipts must increase 9.2 percent over the CFG’s current estimate of FY16 receipts ($1,558.4 million).
Motor fuels tax receipts decreased 16.9 percent in November and have declined by an identical amount over the first five months of the fiscal year. Lower fuel prices have resulted in lower tax revenue because these taxes are based on a percentage of wholesale fuel prices.
From Office of State Budget Director