Kentucky General Fund, Road Fund see substantial growth
Published 11:54 am Wednesday, January 11, 2023
Kentucky’s General Fund and the Road Fund both saw substantial increases in revenue for December compared to last year, according to figures released by the Office of State Budget Director on Tuesday.
General Fund receipts rose 3.3% compared to December 2021, with total revenues for the month at $1,435.7 million. Receipts have now risen 5.8% for the first half of the fiscal year, but when adjusting for a one-time legal settlement received in September of FY22, General Fund receipts have risen 9.2% through the first six months of FY23.
After the Consensus Forecasting Group, increased the official General Fund estimates by $1,442.9 million in FY23 and $1,314.8 million in FY24, that means revenue growth needed in the final six months of FY23 to hit the revised FY23 official estimate is 1.2%.
Budget Director John Hicks says December posted the fourth-highest monthly total ever recorded in the General Fund, due to several factors.
“We have seen strong sales tax growth for nearly two years, and individual income withholding receipts continue to rise,” he said. “Sales tax receipts in December were $461.7 million, the fifth-highest monthly total. General Fund revenue growth in the past two Decembers was 16.1% in FY21 and 10.4% in FY22, so the revenue generated from 3.3% total revenue growth was formidable due to the high prior-year levels of revenue.”
Looking to the rest of the fiscal year, Hicks stated, “Revenues will start to be affected by the many tax law changes from the 2022 legislative session that become effective in January 2023, particularly the 10% reduction in the individual income tax, and the addition of sales tax to 35 additional services.”
Regarding the Road Fund, he added, December’s motor fuels tax receipts were the highest in over three years, growing 6.0% for the month and are up 1.8% for the year. Year-to-date increases in motor fuels are strictly due to increases in gallons sold, which are aided by lower motor fuels prices and the current freeze on motor fuels tax rates.