The Office of State Budget Director on Wednesday reported December’s General Fund receipts totaled $1,508.7 million, a 5.1 percent increase in collections over December 2022. The largest increases were from the new pass-through entity tax (PTE), sales and gross receipts taxes, property tax collections, and interest income. The December receipts were boosted by the new (PTE) tax which create a dollar-for-dollar refundable credit on upcoming individual income tax returns. Individual income tax receipts have increased 2.7 percent for the first six months of the fiscal year that ends June 30, 2024.
The official FY24 General Fund revenue forecast, which was revised by the Consensus Forecasting Group on December 8, 2023, calls for 2.7 percent revenue growth. Revenues must increase 1.3 percent over the final six months of the fiscal year to meet the estimate.
“Although General Fund receipts softened somewhat in the second quarter of FY24, collections remain significantly above the projected revenues for the enacted FY24 budge,” said State Budget Director John Hicks. “Both withholding and sales tax receipts were strong in December, indicating that Kentuckians are seeing wage gains which supports a vibrant consumption base. Withholding collections fell 1.1 percent even with a 10 percent reduction in the tax rate compared to last year.”
Among the major accounts:
• Sales and use tax receipts rose 6.0 percent in December and have increased 5.7 percent for the year. Sales tax collections have now risen for 20 consecutive months.
• Business tax receipts declined 2.1 percent for the month and have declined 4.6 percent for the year.
• Individual income tax collections grew 6.7 percent in December on the strength of PTE receipts. Withholding collections were down 1.1 percent in December and all of the other components of the tax were lower as well. Year-to-date collections in this account have increased 2.7 percent.
• Property tax collections rose 7.3 percent in December and are up 1.0 percent for the year. The November through February period in the property tax collection cycle is typically volatile, as witnessed by $24.1 million increase in real property tax and the $17.3 million monthly decline in the public service property tax.
• Cigarette tax receipts decreased 31.0 percent in December. Through the first six months of the year, collections have fallen 10.1 percent in this account.
• Coal severance tax receipts fell 50.5 percent to $3.9 million in December and have fallen 27.8 percent for the year.
• Income on investments contributed to the December gains with revenue of $22.8 million, a $12.8 million improvement over December 2022.
Road Fund receipts for December totaled $146.6 million, a 7.2 percent increase from December 2022 levels. Year-to-date receipts have increased 8.8 percent. The official Road Fund revenue estimate, which was revised in December, calls for revenue growth of 7.3 percent for FY24, which is $202 million more than the current budget relies on. Given the year-to-date collections, receipts must increase 6.0 percent over the remainder of the fiscal year to meet the estimate.
Among the accounts, motor fuels receipts grew 9.3 percent in December, and are up 13.1 percent for the first six months of the year. Motor vehicle usage revenue rose 2.1 percent in December and has increased 4.9 percent year-to-date. License and privilege receipts rose 10.5 percent for the month due in large part to a timing issue in the collection of some fees. For the year, revenues have fallen 0.8 percent in this category of accounts.
To access the full report, visit www.osbd.ky.gov
Office of State Budget Director
