State Budget Director John Hicks reported today that General Fund receipts grew 11.3 percent in September with revenues of $1.67 billion. Collections for the month exceeded last September’s total by $169.3 million. So far this fiscal year (FY27), General Fund revenues have increased 12.8 percent.
The Consensus Forecasting Group (CFG), the body that estimates state revenues, recently updated the official General Fund revenue estimates for FY27 and FY28, which calls for revenue to increase 5.7 percent compared to FY26 receipts. Based on September’s official revenue estimate, General Fund revenues must grow 3.6 percent over the remainder of the fiscal year to meet the official estimate. To meet the original budget estimate, revenues would need to decline by 4.6 percent the rest of the year.
State Budget Director John Hicks observed that “General Fund receipts for September posted the highest month of collections ever recorded, outside of the months of April when timely-filed individual and corporate income tax returns are due. Revenue growth of 12.8 percent for the first fiscal quarter of FY27 reinforced a strong final quarter in FY26 where General Fund revenues increased 7.2 percent. Major business taxes have led the way, but the resilient consumer sector in Kentucky has produced strong sales tax growth of 5.8 percent. First-quarter results for the General Fund are consistent with the revised official estimates from the September 2026 meeting of the CFG.”
Among the major General Fund accounts:
• Individual income taxes grew 4.4 percent due to increases in estimated payments and the pass-through entity tax (PTET). Year-to-date collections for the income tax have fallen 4.4 percent, primarily due to a 12.5 percent reduction in the income tax rate.
• Sales tax revenues grew 4.5 percent in September and have increased 5.8 percent in the first three months of the year.
• Major business tax receipts rose 51.2 percent for the month and have increased $444.8 million, or 136.7 percent, through the first quarter of FY27.
• Cigarette taxes fell 0.5 percent in September but have grown 0.5 percent for the first three months of the fiscal year.
• Property taxes rose 18.3 percent in September and have increased 17.7 percent for the year.
• Coal severance tax receipts fell 62.8 percent, or $2.3 million, in September and are down 4.0 percent year-to-date.
Road Fund receipts of $150.5 million were 2.0 percent less than what was collected last September. Motor fuels taxes decreased 5.2 percent while usage taxes rose 2.1 percent. The official Road Fund revenue estimate calls for a 0.8 percent increase in receipts for the entire fiscal year. Based on year-to-date collections, revenues must increase 3.0 percent for the remainder of the fiscal year to meet the estimate.
Among the Road Fund accounts:
• Motor fuels receipts fell 5.2 percent in September.
• Motor vehicle usage collections rose 2.1 percent for the month. Year-to-date collections are down 1.4 percent.
• License and privilege taxes grew 1.6 percent in September. For the first three months of the fiscal year, receipts have decreased 1.3 percent.
Office of State Budget Director