FRANKFORT — Bucking an 11-month trend, state revenue was up in November from the previous year, but Kentucky's top budget official warned Thursday that the state is not out of its fiscal free-fall.
General Fund receipts were up 2.4 percent in November compared to the previous November. Revenue was $722.3 million compared to $705.2 million for November 2008.
This is the first time in 11 months that the state's revenue grew from the previous year. However, State Budget Director Mary Lassiter warned that November's uptick in receipts might be an anomaly and not necessarily a signal that the state's cash crunch is over.
"While we are glad to see some positive growth in receipts, the fall months are particularly vulnerable to irregular collections of one-time revenues," Lassiter said in a news release. "Combing the two largest sources of receipts, sales and individual incomes taxes, collections fell 0.7 percent — so that remains a major concern."
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To meet projections for this fiscal year, revenue can decline only by 0.1 percent for the remaining seven months of the fiscal year, which ends June 30. The General Fund has fallen 3.6 percent for the year
The state's declining revenue will be examined when a group of independent economists meets Dec. 21 to possibly revise its estimate of revenue for the current fiscal year. Preliminary estimates released in October showed a possible $161 million shortfall.
In preparation for the Dec. 21 meeting, Gov. Steve Beshear has asked many agencies to prepare for a possible 6 percent budget cut. Since Beshear took office in 2007, the state has had to cut budgets five times.
Nearly all states are struggling to balance their books as the national recession drags on. A new report by the National Conference of State Legislatures shows that 36 states have discovered fiscal shortfalls for the current fiscal year for a collective shortfall of $28.2 billion.
Meanwhile, the state's Road Fund receipts for November totaled $102.8 million, a decrease of 0.5 percent from November 2008 levels. For the year, the Road Fund is down 2.7 percent. However, the fund is projected to drop 4.3 percent this fiscal year. It would have to decline 5.5 percent for the remainder of the fiscal year to meet that projection.
Lassiter attributed the better-than-expected performance to an increase in auto sales that brought "refreshingly strong" motor vehicle usage tax receipts.