State General Fund receipts are up overall for FY 16
12/16/2015 06:00 PM
FRANKFORT – The first five months of fiscal year 2016 saw Kentucky’s General Fund grow 2.9 percent from a year ago.
That was the word from the staff of the Office of the State Budget Director who projected revenue estimates to members of the Consensus Forecasting Group on Wednesday that will help in determining the budget proposal for the 2016 session.
The first quarter of fiscal 2016 saw General Fund growth of 4.5 percent, before November’s decline of 3.9 percent, because of unprecedented growth to 12.8 percent in November 2014.
Greg Harkenrider, deputy director of the Office of State Budget Director, says that sales and individual income tax continue to be one of the key areas of growth in Kentucky’s economy.
“We’ve had pretty good job growth, and pretty good unemployment rate, and some good overtime and wage and salary growth,” Harkenrider said. “Sales tax is up 6 percent.”
Year-to-date road fund receipts have fallen 7.2 percent. Motor fuels tax receipts are down 16.9 percent over the first five months of FY16. Lower fuel prices have resulted in lower tax revenue because these taxes are based on a percentage of wholesale fuel prices.
Harkenrider says that even though those receipts are down, consumers are spending that money elsewhere and still helping the state’s economy.
“It’s a detriment to the fuels tax, but it helps the sales and use tax because the consumers, to fill up their vehicles, they’re paying a fraction of the price they used to pay, so that extra money can be spent on sales taxable items at convenience stores and we’ve found it’s given the sales tax a bump,” Harkenrider said.
Overall, Harkenrider sees a strong economic future ahead for the commonwealth led by manufacturing.
“Our industry mix is favorable right now,” Harkenrider said. “Manufacturing is going strong and I give it a strong assessment. If you look at how the analysts are judging it, we’re in a good mix.”
Among some of the major accounts:
- Corporate income tax receipts have increased 3.1 percent
- Individual income tax collections have increased 3.4 percent
- Property tax collections have fallen 3.6 percent (Timing issues continue to affect property tax collections as public service company collections declined sharply)
- Cigarette tax receipts are up 1.9 percent
- Lottery receipts are up 2 percent
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