By Tom Latek
Kentucky Today
The Office of State Budget Director reported Friday that March and April General Fund receipts declined by 6.4 percent compared to the same two-month period last year, and by 0.2 percent through the first 10 months of the 2025 fiscal year, which ends June 30.
This report combines the revenue receipts for the months of March and April, because the Kentucky Department of Revenue has been implementing an initial phase of a new information technology system which delayed the reporting. The decline in receipts was attributable mostly to the individual income tax. About half of that decline was due to the pass-through entity tax, which involved two tax years of activity during FY24 but just one tax year during the current year. Sales tax receipts were flat and major business taxes rose by five percent.
The official revenue estimate calls for no revenue growth for the current fiscal year, so to meet the official revenue estimate, receipts need to increase by 1.1 percent over the last two months of the fiscal year.
State Budget Director John Hicks said, “In addition to the implementation of a new revenue system, the income tax filing deadline was extended from April 15 to November 3 due to the flooding disasters in Kentucky. Those two unique situations affect how the receipts reflect underlying economic conditions. The next two months’ revenue data will help make that clearer. Both payroll withholding and sales tax receipts were flat for the two-month period.”
Road Fund receipts declined by 6.3 percent in March and April, while year-to-date collections are flat. The official revenue estimate calls for a decline of 2.6 percent for the current fiscal year. This means receipts can decline by 14.5 percent over the last two months of the fiscal year and still meet the official revenue estimate.