State receipts have 4.4 percent increase in January

Published 11:18 am Wednesday, February 14, 2024

The Office of State Budget Director has reported that January’s General Fund receipts totaled $1,344.8 million, 4.4 percent more than what was received in January of last year and an increase of $56.8 million.

January’s sales tax receipts hit a record high at $586.2 million. Large increases also occurred due to the new portion of the individual income tax, known as the pass-through entity tax (PTE), payroll withholding receipts, and interest income.  The new PTE tax which create a dollar-for-dollar refundable credit on upcoming individual income tax returns.

The official FY24 General Fund revenue forecast, which was revised by the Consensus Forecasting Group on December 8, 2023, calls for 2.7 percent revenue growth, which means revenues must increase 0.7 percent over the final six months of the fiscal year to meet the estimate.

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State Budget Director John Hicks remarked: “General Fund collections produced broad-based growth in January.  Year-to-date collections are on pace to achieve the new official estimate for FY24 and are significantly above the projected revenues for the enacted FY24 budget. Both withholding and sales tax receipts were quite strong in January, sending a clear signal that Kentuckians are experiencing wage gains which support a brisk pace of consumer spending.”

Road Fund receipts fell 5.7 percent in January with total collections of $135.8 million.  Motor fuels revenues grew at a higher-than-expected rate while motor vehicle usage taxes declined sharply.  Year-to-date collections have increased 6.7 percent. The official Road Fund revenue estimate calls for revenues to grow 7.3 percent for the fiscal year. Based on year-to-date tax collections, revenues must increase 8.2 percent for the remainder of the fiscal year to meet the official forecast.

Among the accounts, motor fuels collections rose 18.9 percent, motor vehicle usage revenue fell by 26.7 percent, and license and privilege receipts dropped 19.3 percent.

The Budget Office noted motor vehicle usage and motor vehicle license accounts incurred some timing irregularities due to the closure of vehicle registration and licensing operations in the first part of January 2024 due to the migration of the 45-year-old vehicle information system to a new system.