Kentucky general fund, road fund revenues continue to grow

(The Center Square) – Kentucky tax revenues continue to rise.

Earlier this week, Budget Director John Hicks reported the state received nearly $1.44 billion in general fund revenues in December. That represented a 3.3% increase from December 2021 and was the state’s fourth-highest monthly total.

“We have seen strong sales tax growth for nearly two years, and individual income withholding receipts continue to rise,” Hicks said in a statement.

Sales tax revenue grew by 6.4% to $461.7 million, the fifth-highest amount raised by the state.

The report was the first one the Office of the State Budget Director released since the Consensus Forecasting Group, which determines budget estimates, revised its projections for the 2022-23 and 23-24 fiscal years. The new 22-23 fiscal year budget forecast is $15.2 billion, a $1.44 billion increase from the initial estimate.

Tax revenues have increased by 5.8% for the first half of the fiscal year. For the state to meet the new projected total, revenues must increase by 1.2% through June 30.

Hicks also noted state revenue figures will begin to change starting this month. That’s due to reforms the General Assembly passed to cut the personal income tax rate from 5% to 4.5% and add the 6% sales tax to 35 services.

Kentucky’s Road Fund also saw a year-to-year increase in December. The $136.7 million raised represented a 9% jump from the December 2021 total.

The Road Fund has not enjoyed the same type of growth as the General Fund, due mainly to Gov. Andy Beshear suspending a 2-cent increase in the gas tax that was supposed to take effect last July.

The gas tax is part of road fund revenues, with motor vehicle taxes and licensing fees contributing largely to that budget. Kentucky collected $72.5 million in gas taxes for December. That marked the state’s best month for gas taxes in more than three years, according to Hicks’ office.

In order for the state to meet the projected $1.72 billion road fund for the 22-23 fiscal year, road fund revenues must increase by 2.1% over the next six months.