The Office of State Budget Director on Monday reported the state’s General Fund receipts rose 6.1 percent in September with revenues of $1,570.8 million.
Collections for the month exceeded last September’s total by $90.4 million. It is the 13th consecutive month of General Fund receipts in excess of $1 billion. So far this fiscal year (FY24), the General Fund has grown 6.9 percent.
Based on September’s results, General Fund revenues can decline 2.4 percent for the remainder of the fiscal year and still meet the official estimate. The Consensus Forecasting process began in September with preliminary estimates and will issue final, official revenue estimates for Fiscal Years 2024-2026 in December.
“The newly created Pass Through Entity Tax (PTET) collections in September were $146.5 million,” said State Budget Director John Hicks. “The tax is retroactive to tax year 2022 returns. September 15th was the due date to file with an extension for federal tax year 2022 pass-through returns.
“The surge in September for Kentucky PTET receipts was likely a tax-planning strategy for pass-through entities to pay state taxes to maximize tax savings at the federal level on 2022 tax returns. It is anticipated that $187.4 million in PTET receipts collected year-to-date to meet the federal tax return deadline will be partly offset in future periods in FY24 through lower declaration payments and higher state refunds. Sales tax receipts grew 6.1 percent, continuing a steady pace after three years of double-digit percentage growth.”
Among the major accounts:
• Individual income taxes grew 20.8 percent in September on the strength of the new pass-through entity tax which had revenues of $146.5 million. Excluding these funds, individual income tax collections were $34.3 million less than last year. With the income tax rate reduction from 5 to 4.5 percent, payroll withholding receipts still increased by 3.2 percent.
• Sales tax revenues grew 6.1 percent in September and have increased 5.5 percent in the first quarter. The positive growth in the first quarter of FY24 marks the 13th consecutive quarter in which sales taxes have grown.
• Corporation income and LLET tax receipts fell 17.1 percent for the month and are down 4.4 percent in the first quarter of the fiscal year.
• Cigarette taxes fell 9.6 percent in September and have declined 7.3 percent for the first three months of the fiscal year.
• Property taxes grew 10.7 percent in September and have increased 4.1 percent for the year.
• Coal severance tax receipts fell 8.5 percent in September but have grown 2.4 percent year-to-date.
• Lottery revenues rose 3.7 percent in September and are up 4.0 percent for the year.
• Income on investments posted receipts of $24.5 million in September and $68.8 million in the first quarter of FY24.
Road Fund receipts grew 11.2 percent in September as motor fuels taxes increased 20.2 percent. September Road Fund collections were $154.8 million, and year-to-date collections have grown 10.2 percent. Based on year-to-date collections, revenues can fall 8.7 percent for the remainder of the fiscal year to meet the budgeted estimate.
Among the accounts:
• Motor fuels receipts grew 20.2 percent in September. Collections in this account have increased 14.0 percent for the year.
• Motor vehicle usage collections rose 1.6 percent for the month. Year-to-date collections are up 3.4 percent.
• License and privilege taxes fell 8.0 percent in September. For the first three months of the fiscal year, receipts have increased 8.3 percent.
• Nontax receipts rose $1.5 million to $3.0 million in September. For the year, collections are $4.0 million less.
Office of State Budget Director
