The Office of State Budget Director on Monday announced Kentucky’s General Fund receipts for July, the first month of Fiscal Year 2025 (FY25), totaled $1,294.4 million, a 12.2 percent increase compared to July 2023 receipts.
The official revenue estimate for FY25 calls for revenue to increase 0.1 percent compared to FY24 actual receipts. Therefore, receipts can decline 0.9 percent over the remaining eleven months of the fiscal year and still meet the General Fund revenue estimate.
“General Fund revenues posted substantial growth primarily in the corporate income tax, which accounted for most of the growth compared to July 2023,” said State Budget Director John Hicks .”Sales tax receipts were flat and individual income tax receipts are affected by a 11.1 percent reduction in the tax rate, from 4.5 to 4.0 percent.”
Among the major accounts:
• Corporate income tax receipts of $258.8 million exceeded July 2023 amounts by $220.8 million. This was the second largest monthly collection in the 18 years since the corporate taxes underwent significant reform.
• Individual income tax receipts fell 21.0 percent while the tax rate declined by 11.1 percent.
• Sales tax revenues fell slightly by 0.7 percent to $518.6 million, but the level of collections is the third largest monthly total outside of winter holiday collections.
• Cigarette tax collections increased 3.0 percent for the month to $21.8 million.
• Property tax receipts declined by 28.8 percent due primarily to the omitted and delinquent property tax accounts. Early in the year, it is common to see large percentage changes in property tax collections because of the collection schedule.
• Coal severance tax revenues declined by 23.2 percent to $6.0 million.
• Lottery revenues increased 4.1 percent to $25.5 million.
• Income on investments increased 77.8 percent to $37.6 million –the largest monthly total ever recorded.
Road Fund revenues for July totaled $163.5 million, a 14.6 percent increase compared to last July. The official Road Fund revenue estimate for FY25 calls for revenue to decline 2.9 percent compared to FY24 actual receipts. Based on the first month’s receipts, revenues can decline 4.3 percent for the rest of the fiscal year and still meet the official estimate. Motor fuels tax receipts are expected to decline starting with August receipts due to a 2.3 cent tax rate decrease that went into effect July 1. Motor fuels tax collections from July are due to the state in the month of August.