Kentucky Tax Revenue Fell in January
BY MICHON WINDSTORM | KENTUCKY
FRANKFORT- After a lackluster January, Kentucky tax revenues must grow in order to meet the estimate for the fiscal year.
Kentucky Budget Director John Chilton reported General Fund receipts fell 3.4 percent in January. Tax revenues collected last month were $924.6 million compared to $956.8 million collected in January 2018.
The General Fund revenue estimated for FY19 calls for revenue growth of 3.3 percent compared to FY18. In order to obtain that, revenues need to increase 4.4 percent for the remainder of the fiscal year.
The loss in tax revenue is in part related to the federal tax reform, where Kentuckians are paying less individual income tax, corporations are also paying less taxes. However, as a result of legislation passed during the 2018 General Assembly session, sales and use taxes helped offset some of the losses from the income tax. The United States Supreme Court’s ruling allowing states to collect online sales tax also helped boost the General Fund.
“Corporation income taxes fell by a larger percentage, 60.7 percent, but the nominal loss was only $8.0 million compared to $82.5 million decrease in the individual income tax collections,” said John Chilton. “The sales and use tax grew by 9.8 percent in January, partially offsetting the income tax losses. This surge in consumption taxes is directly attributable to the expansion of the sales tax base and our ongoing efforts to capture a higher percentage of online sales. December and January losses in the General Fund have created a more formidable challenge to hitting the official revenue estimate, but our latest internal estimates for FY19 still project receipts somewhat less than the budgeted levels.”
While the income tax fell 19.3 percent in January, cigarette taxes were up 105 percent for the month. Since the $0.50 increase in cigarettes went into effect July 1, revenues have grown 71.4 percent.
Property taxes also grew to 6.3 percent for January, up 4 percent for the year. Lottery revenues remained equal to 2018, while coal severance tax receipts fell 16.4 percent for the month, year-to-date collections are down 15 percent.
Road fund receipts grew 2.5 percent in January, collecting $126.3 million, which is a 4 percent increase compared to last year.