FRANKFORT – The Office of State Budget Director (OSBD) reported Wednesday that April’s General Fund receipts rebounded from a disappointing March performance and recorded the seventh positive month out of the first ten months of FY17. Collections grew 1.7 percent compared to April of last year, an increase of $18.7 million. Total revenues for the month were $1,095.8 million, compared to $1,077.1 million received during April 2016. Receipts have now grown 1.3 percent for the first 10 months of FY17.
The official enacted budget calls for 2.7 percent revenue growth for the entire fiscal year. To meet the official revenue estimate, receipts must increase 9.7 percent over the last two months of the fiscal year. In April, OSBD economists released an interim revenue estimate in which they called for revenues to grow 1.6 percent in FY17, a shortfall of $113.2 million compared to budgeted levels.
Road Fund receipts for April totaled $123.9 million, a 5.0 percent decrease over April 2016 levels. Year-to-date receipts for FY17 are up 1.1 percent.
State Budget Director John Chilton underscored the importance of the individual income and sales tax when evaluating monthly receipts. “The General Fund grew a very modest 1.7 percent in April and stands at 1.3 percent through the first ten months of FY17. Over 75 percent of General Fund receipts come from the sales tax (33.4 percent) and the individual income tax (42.5 percent). When these two taxes go through cyclical slumps, the General Fund struggles to grow. So far this fiscal year, the sales tax has grown 0.7 percent and the individual income tax stands at an increase of 2.6 percent after posting growth of 6.0 percent and 5.2 percent, respectively, in FY16. We will continue to look for signs of improving growth in the upcoming months.”
Among the major accounts:
– Sales and use tax receipts increased 1.8 percent for the month and have now grown 0.7 percent year-to-date. Receipts in this account had declined in five of the six previous months, including each of the last three months.
– Corporation income tax receipts rose 1.4 percent in April but have decreased 5.7 percent so far this year. Declaration receipts improved but were mostly offset by lower balances on net returns. Compared to last year, most of the decrease in corporate tax receipts occurred in March 2017. We had hoped that the March decrease was attributable to the change in the due date of Federal corporate tax returns but the rebound that we hoped for did not occur in April.
– Individual income tax collections grew 3.8 percent in April and have grown 2.6 percent though the first 10 months of FY17. Withholding receipts have remained strong this year, increasing 3.3 percent so far in FY17. The remaining accounts, declarations, net returns and fiduciary, have all declined in FY17.
– Property tax collections rose 8.6 percent in April and are up 3.0 percent year-to-date.
– In April, cigarette tax receipts declined 1.7 percent and have declined 2.1 percent year-to-date.
– Coal severance tax receipts reverted to their declining trajectory, falling 7.8 percent in April after posting gains in each of the immediately preceding three months. Through the first ten months of the fiscal year, collections are down 19.7 percent compared to last year.
Road Fund receipts fell 5.0 percent in April with collections of $123.9 million. Year-to-date collection now stand at an increase of 1.1 percent. The official Road Fund revenue estimate call for revenues to decline 1.7 percent for the fiscal year. Based on year-to-date tax collections, revenues can fall 15.3 percent for the remainder of the year to meet the official estimate. In April, we released our interim revenue estimate that calls for Road Fund revenues to end the year with growth of 1.2 percent, or $44.2 million above budgeted levels. Among the accounts for April, motor fuels grew 0.1 percent, motor vehicle usage revenue fell 14.9 percent and license and privilege receipts increased 2.0 percent.
Additional information is available online at http://osbd.ky.gov/