The Office of State Budget Director reported today that General Fund receipts increased 7.7 percent in August compared to last year. Total collections equaled $1,076.3 million, $77.1 million higher than August 2022. Through the first two months of Fiscal Year 2024 (FY24), General Fund receipts have increased 7.4 percent.
The official revenue estimate for FY24 calls for General Fund revenues to fall 0.2 percent compared to FY23 actual receipts. Based on Augusts’ results, receipts can decline 1.4 percent for the remainder of the fiscal year and still meet the official estimate. The Consensus Forecasting Group will meet later this month to provide preliminary estimates for the upcoming 2024-2026 biennial budget.
State Budget Director John Hicks remarked, “Growth in August receipts came from the sales tax, major business taxes, income from investments, and the newly enacted pass-through entity tax portion of the individual income tax. The $36.4 million received in the pass-through entity tax receipts is likely an acceleration of receipts due in part to the retroactive enactment of the new tax back to January 1, 2022. Sales tax and investment income receipts continue a trend of strong revenue performance. Though there has been good year-to-date growth in the General Fund, the 10 percent reduction of the individual income tax rate will continue to depress receipts, especially in the withholding and declaration components of that tax.”
Among the major accounts:
• Individual income tax collections rose 1.4 percent even as withholding and declaration payments declined. The revenue gain came almost entirely from the newly enacted pass-through entity tax which produced $36.4 million in revenue for the month.
• Sales tax revenues grew 5.0 percent in August and are up 5.1 percent through the first two months of the fiscal year. These growth rates are in addition to double-digit growth rates during the same months last year.
• Corporation income tax and Limited Liability Entity Tax collections were $32.2 million for the month, an increase of $27.4 million compared to prior year totals. Year-to-date receipts in these accounts have increased 88.7 percent, or $35.8 million.
• Cigarette taxes rose 0.5 percent for the month but have declined 6.1 percent for the year.
• Property taxes fell 21.1 percent in August and have decreased 1.3 percent for the fiscal year. Large swings in the timing of receipts are not unusual early in a fiscal year for this account.
• Coal severance tax collections in August rose 22.2 percent to $6.7 million and are up 9.8 percent through the first two months of the fiscal year.
• Lottery revenues rose 4.1 percent to $25.5 million in August and are up 4.2 percent through the first two months of FY24.
• Income from investments grew $19.1 million in August with total receipts of $23.1 million.
Road Fund receipts for August totaled $167.9 million, an increase of 15.2 percent from August 2022 levels. Through the first two months of the fiscal year, collections in this fund have grown 9.7 percent. The official Road Fund revenue estimate calls for a 4.1 percent decline in receipts for FY24. Based on year-to-date collections, revenues can fall 6.8 percent for the remainder of the fiscal year and still meet the official estimate.
Among the accounts:
• Motor fuels rose 15.9 percent in August and have increased 10.6 percent for the year.
• Motor vehicle usage collections grew 5.8 percent for the month and have grown 4.3 percent for the first two months of the fiscal year.
• License and privilege tax rose 25.3 percent in August and have grown 13.3 percent year-to-date.
To access the receipts report, visit osbd.ky.gov.
Office of State Budget Director
