FRANKFORT, Ky. (KT) - State budget officials report the first month of the 2019 Fiscal Year was a good one for state revenues, with both the General Fund and Road Fund exceeding forecasts.
State Budget Director John Chilton announced Friday that Kentucky’s General Fund receipts for July totaled $830.2 million, a 4.7 percent increase over July 2017.
Chilton said the impacts of the law that made changes in the state sales tax system are readily apparent in the July collections. "Cigarette taxes collections rose $23.3 million over last July which is a direct result of the 50 cent per-pack increase in the cigarette tax, including the corresponding floor stock tax. Additionally, sales tax is now applied to selected services and it is expected to generate an additional $188.2 million in revenue this year.
As for the future, Chilton said, “Since most of the sales tax collected by retailers in July will not be remitted until August, most of the collections arising from the newly taxable services will not be begin until then. Furthermore, revenue gains from the more broadly applied sales tax will be offset somewhat by cuts in the individual and corporation income tax rates,” as the top six percent rate has been cut to five percent.
Chilton said as the fiscal year progresses, the effects of revenue enhancements and the tax cuts will become more clear. “But for now, tax receipts are performing as anticipated in the revenue estimation process.”
The official revenue estimate for FY19 calls for revenue to grow 3.3 percent compared to FY18 actual receipts. Based on July’s receipts, General Fund revenues need to increase 3.2 percent for the remainder of the fiscal year to meet that estimate.
Meanwhile, Road Fund revenues for July totaled $127.7 million, a 13.8 percent rise over a year ago. The official Road Fund revenue estimate for FY19 calls for revenue to decline 0.3 percent compared to FY18 actual receipts. Based on the first month’s receipts, revenues can fall 1.4 percent for the rest of the fiscal year and still meet budgeted levels.
Chilton reports all three road fund categories were above July 2017:
-Motor fuels tax receipts rose 0.8 percent.
-Motor vehicle usage tax increased 21.6 percent due, in part, to FY17 collections being under-reported as a result of a timing issue.
-License and privilege taxes rose $5.4 million.