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State General Fund receipts mark fifth consecutive month exceeding $1 billion in revenue

January’s General Fund receipts totaled $1,212.9 million, marking an unprecedented fifth consecutive month in which General Fund collections have exceeded $1 billion.

The revenues were 12.7 percent more than what was received in January of last year, an increase of $136.6 million. Sales, individual income, and business tax accounts all grew substantially. General Fund receipts have now grown 15.4 percent for the first seven months of Fiscal Year 2022 (FY22).

The newly enacted official revenue estimate calls for 7.5 percent growth in General Fund revenues over FY21 totals. Collections for the remainder of the year can fall 2.4 percent and still meet the official estimate.

State Budget Director John Hicks noted that the 12.7 percent increase follows the recent trend of strong revenue performance that corresponds to a period of strong economic growth in Kentucky.

“January’s growth rate of 12.7 percent marks the sixth consecutive month of double-digit percentage growth, a feat not accomplished since FY1991, the first year of the last individual income and sales tax rate increase,” Hicks said.

“The three major revenue sources have all benefited from favorable underlying economic conditions thus far in FY22. Sales tax receipts were up 14.9 percent in January and 13.5 percent year-to-date, highlighting continued strength in consumer spending and consumer sentiment. Individual income tax collections were 12.8 percent higher than January 2021 with year-to-date growth of 9.3 percent, reflecting growth in Kentucky aggregate wages and taxable income. Increases in wages have helped propel the withholding component of the individual income tax 8.2 percent higher through the first seven months of the fiscal year. Major business taxes grew 88.0 percent in January and stand 47.2 percent higher through January, a demonstration that Kentucky’s corporate sector is generating higher business income.”

Among the major accounts:

• Individual income tax collections grew 12.8 percent for the month as all three major components of the tax increased. Revenues have grown 9.3 percent through the first seven months of FY21.

• Sales and use tax receipts continue to exceed expectations. Collections were $516.5 million which marks the single largest monthly total ever. Revenues have grown 13.5 percent year-to-date, partially aided by inflation.

• Combined corporation income and limited liability entity tax receipts totaled $41.8 million in January, an increase of 88.0 percent and have increased 47.2 percent in the first seven months of the fiscal year.

John Hicks

• Property tax collections fell 9.1 percent in January but have increased 3.6 percent year-to-date.

• Cigarette tax receipts rose 27.4 percent for the month but have fallen 4.7 percent year-to-date.

• Coal severance tax receipts continue to show resiliency, increasing 37.9 percent to $5.8 million. Collections have grown 9.3 percent through the first seven months of the fiscal year.

• Road Fund receipts grew 4.0 percent in January to $132.5 million due to increases in both motor vehicle usage and motor fuels tax receipts. Year-to-date collections have increased 3.3 percent. The official Road Fund revenue estimate calls for revenues to grow 2.3 percent for the fiscal year. Based on year-to-date tax collections, revenues must increase 1.0 percent for the remainder of the fiscal year to meet the official forecast.

Among the accounts, motor fuels collections grew 9.2 percent, motor vehicle usage revenue increased 3.9 percent, and license and privilege receipts fell 0.6 percent.

Receipt report is available at www.osbd.ky.gov

Office of the State Budget Director

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