The Office of State Budget Director reported on Monday that February’s General Fund receipts fell 6.5 percent compared to February of last year, while the Road Fund saw a 5.2 percent increase compared to February 2023.
General Fund collections for the month were $1,007.6 million. February saw small gains in sales and gross receipts, property and miscellaneous taxes and large drops in individual and business taxes. Receipts have now grown 3.0 percent through the first eight months of FY24. The official General Fund revenue estimate calls for revenues to increase 2.7 percent for the fiscal year. Based on year-to-date tax collections, revenues must increase 2.1 percent for the remainder of the year to meet the official estimate.
State Budget Director John Hicks noted the year-over-year decline was concentrated in the individual income tax due to a lower tax rate and some timing issues.
“The income tax rate in February 2024 was 4.0 percent compared to a 4.5 percent in February 2023. The other part of the decline was due to some receipts which were normally received in February but were received in late January in FY24. Withholding in January and February combined fell 9.0 percent, but the individual income tax rate fell 11.1 percent. Wage and salary incomes continue to grow in Kentucky as the pace of wage expansion has persistently outpaced the rate reductions to the individual income tax.”
Road Fund receipts grew 5.2 percent in February as collections totaled $140.0 million. Total revenue has grown 6.5 percent through the first eight months of FY24. Motor fuels collections grew 14.4 percent while motor vehicle usage tax receipts rose 13.0 percent. License and registration collections were somewhat depressed because of delays in deposits as Kentucky’s vehicle information system is being updated. The official Road Fund revenue estimate calls for revenues to increase 7.3 percent for the fiscal year. Based on year-to-date tax collections, revenues must increase 8.8 percent for the remainder of the year to meet the official estimate.
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