State Budget Director John Chilton said Kentucky's tax collections in July increased nearly $15 million from last year.
Chilton announced Monday that state General Fund receipts for July totaled $845.7 million, a 1.9% increase compared with receipts in July 2018 — $830.2 million.
According to Chilton's office, increases in the sales and use tax and cigarette taxes out-paced declines in the income, natural resources and property taxes as the impacts of tax law changes continue to influence monthly receipts.
The official revenue estimate for FY20 calls for revenue to grow 0.6% compared to FY19 actual receipts. Based on July’s receipts, General Fund revenues need to increase 0.5% for the remainder of the fiscal year to meet the official estimate.
Chilton emphasized that economic growth continues in the Commonwealth but until full implementation, tax law changes will dominate the flow of monthly receipts.
"Clearly the impacts of legislation are continuing to enhance several of our revenue accounts and that will continue for many more months. Fiscal Year 2020 has started much like FY19 ended, with strong growth in sales and excise taxes coupled with declines in the income-related revenue sources,” he said. “Due to the effective dates of the tax law changes and taxpayer responses to the changes, it may be well into the fiscal year until tax policy impacts are more clearly discernible in actual receipts. Additionally, it is common to see large fluctuations in growth rates early in the fiscal year until receipts begin to stabilize; typically, after three or four months.”
Sales tax revenues grew 10.7% in July, but individual income tax receipts fell 0.5%.
Total cigarette tax collections fell 24.0% in July because the floor stocks tax yielded $13.1 million in July 2018 and that revenue was nonrecurring. The cigarette excise and surtax grew 13.9% in July 2019 when the effects of the floor stocks tax are eliminated.
Property tax receipts fell 22.0% on a very small base of collections.
Road Fund revenues for July totaled $128.2 million, a 0.4% increase compared to last July, according to Chilton's office.
The official Road Fund revenue estimate for FY20 calls for revenue to decline 3.7% compared to FY19 actual receipts. Based on the first month’s receipts, revenues can fall 4% for the rest of the fiscal year and still meet budgeted levels
Jonathan Greene is the editor of The Register; follow him on Twitter @jgreeneRR.