The Office of State Budget Director reported today that March’s General Fund receipts rose 9.0 percent compared to March of last year, an increase of $78.7 million. Total revenues for the month were $954.8 million, compared to $876.1 million during March 2020. Receipts have now grown 5.9 percent for the first nine months of FY21. For the just-completed quarter, total General Fund collections grew 6.7 percent, the largest rate of growth this fiscal year. Growth rates for three-quarters of FY21 have been 5.8, 5.3 and 6.7 percent, respectively.
The official revenue estimate calls for 1.4 percent revenue growth for the fiscal year. To meet the estimate, receipts can decline 11.2 percent over the last three months of FY21. Last year General Fund receipts declined by 4.5 percent over the last three months.
Road Fund receipts for March totaled $132.5 million, a 4.1 percent increase compared to March 2020 levels. Year-to-date receipts have increased 0.8 percent. After posting small but positive rates of growth in each of the first two quarters of the fiscal year, receipts declined 0.4 percent in the third quarter.
State Budget Director Hicks noted that the 9.0 percent growth in March propelled the General Fund to a 6.7 percent increase in the third quarter of FY21. “Both the March receipts and the collections for the third quarter of FY21 were strong, with quarterly totals fueled by growth in the income, sales, business, and property taxes. The injection of federal relief payments to businesses and individuals into the Kentucky economy, as well as stronger than expected payroll and personal consumption, has led to economic and revenue growth ahead of projections as all the major tax accounts are ahead of the budgeted forecast. March’s 9.0 percent growth was aided by favorable timing issues on the insurance premiums tax and very strong growth in the individual and corporation income taxes.”
Among the major accounts:
• Sales and use tax receipts fell 0.1 percent for the month but have grown 5.9 percent year-to-date. Poor weather in the month of February likely hit the pause button in the strong year-to-date growth trend in the sales tax.
• Combined corporation income and LLET tax receipts rose 45.2 percent as an increase in the corporation income tax offset a decline in the LLET. For the year, collections in these accounts have increased 28.4 percent.
• Individual income tax collections rose 15.6 percent in March as withholding and net returns improved by nearly $42.0 million. Collections have grown 4.9 percent through the first nine months of FY21.
• Property tax collections declined 5.5 percent for the month but have grown 4.8 percent year-to-date.
• Cigarette tax receipts fell 22.1 percent as the recent trend in volatility in cigarette revenue continues. Year-to-date this account has decreased 3.4 percent.
• Coal severance tax collections fell 23.6 percent in March with collections of $3.6 million. Collections have declined 12.2 percent through the first nine months of the fiscal year.
Road Fund revenue grew 4.1 percent in March, the largest monthly increase since July and the first positive month since November.
Receipts for the month were $132.5 million, $5.2 million more than last March. Through the first nine months of FY21, receipts have increased 0.8 percent. Road Fund collections declined 0.4 percent in the just-completed quarter after increasing in each of the first two quarters. Growth rates for the three quarters this fiscal year have been 1.9, 0.7, and -0.4 percent, respectively. The official Road Fund revenue estimate calls for revenues to increase 5.8 percent for the fiscal year. Based on year-to-date tax collections, revenues must increase 23.8 percent for the last quarter of FY21 to meet the estimate. Last year Road Fund revenues dropped by 23.6 percent in the final quarter of the fiscal year. Among the accounts, motor fuels fell 11.7 percent, motor vehicle usage revenue grew 30.5 percent, and license and privilege receipts fell 1.7 percent.
To view Monthly & Third Quarter Reports, visit osbd.ky.gov.
Office of State Budget Director
