By RONNIE ELLIS
CNHI News Service
After three straight months of weak tax receipts, including a 2 percent decline in April, state budget officials face the possibility the state may not collect enough revenues this fiscal year to meet budget projections.
The state Road Fund, which is funded by separate taxes and revenues, actually jumped by double digits, establishing an all-time monthly high.
The State Budget Director’s Office announced Friday that April’s General Fund receipts were 2 percent below last April’s, about $16.5 million less. Total revenues for April were $821.4 million compared to $837.9 million last year.
That means General Fund receipts are up 2.1 percent overall over last year through the first 10 months of the fiscal year that ends June 30.
The budget, however, relies on projections of a 2.4 percent increase for the 12 months, so to meet that projection with only two months left in the year, receipts must outpace last year’s over those two months by 3.6 percent.
Given the three months of less than projected receipts, that may be difficult. Budget Director Jane Driskell acknowledged revenues are now on pace to fall slightly below budgeted, enacted levels.
The shortfalls apparently reflect sluggish receipts across the board in the General Fund and might indicate Kentucky’s economy is lagging behind the national economy.
“General Fund revenues were hampered by large declines in sales and use, corporation income and property tax collections,” Driskell said. “Continued weaknesses in the sales tax are particularly conspicuous since the national economy is improving and consumer confidence is growing.”
Sales and use taxes were down in April 7.3 percent (as compared to last year’s April receipts). The shortfall means those taxes have actually declined 1.5 percent for the first 10 months of fiscal year 13.
Even more dramatic, corporation income tax receipts fell 89.7 percent over April 2012, although they are still up 2.8 percent for the year to date.
Individual personal income taxes did better: rising 5.5 percent in April and they are up 5.6 percent for the year so far. Property taxes fell 53.5 percent but are up 3.9 percent for the year. Cigarette taxes grew — by 22.2 percent — but have declined 3 percent for the year.
Coal severance taxes grew 18.6 percent but that is an aberration. Coal severance taxes are down 22 percent for the year, reflecting weak demand and market conditions which have idled many miners in the state.
Road Fund receipts — $143.1 million, an 18.3 percent increase over April 2012 — were fueled by a record amount of motor vehicle use tax receipts, the budget office reported. Those increased 34.8 percent while motor fuels tax receipts rose by a much more modest amount: 5.4 percent.
Driskell’s office estimates revenues in the Road Fund will end up 1.3 percent higher than last year’s.
RONNIE ELLIS writes for CNHI News Service and is based in Frankfort. Reach him at email@example.com. Follow CNHI News Service stories on Twitter at www.twitter.com/cnhifrankfort.