Kentucky Tax Revenues Were Down In May
Despite a strong showing during the first 10 months of the year, tax revenue was down last month in Kentucky, dashing hopes of a sizable surplus at the end of the fiscal year on June 30.
State revenues are still expected to have grown by 3.9 percent over the fiscal year, slightly above the rate the state estimated and budgeted for of 3.2 percent.
“Monthly revenue collections were hampered by declines in several accounts, some expected and some not,” state budget director John Chilton said in a news release.
Some of those “expected” declines include revenues from taxes on insurance premiums, limited liability entities and coal. Coal severance receipts have fallen every month this fiscal year, with a total decline of 32.2 percent.
Unexpectedly, revenues from the state income tax declined 14.8 percent for just the second month this fiscal year.
In all, May receipts into the state’s general fund fell 7.5 percent compared with May of last year — a decrease of $57.3 million.
Receipts into the road fund also took a hit, falling 5.9 percent during May. Most of that decline was due to a 22.6 percent drop in revenue from the motor vehicle usage tax, which is collected when a vehicle is first registered or there is a transfer of ownership.
In October, the state’s Consensus Forecasting Group predicted that the general fund would end the current fiscal year with a $242.3 million surplus, an estimate touted by then-Gov. Steve Beshear as a highlight of his outgoing administration.
Before taking office, Gov. Matt Bevin provided a gloomier assessment of the state’s economic health, citing a report from the outgoing budget director that predicted a $500 million shortfall by the end of the fiscal year.
There’s still one more month in the fiscal year. According to Chilton, the state will avoid a shortfall as long as June receipts aren’t more than 2.9 percent less than June 2015.