State revenue fell 8.1 percent in May, but that’s not as much as feared
Kentucky’s General Fund took a hit in May because of COVID-19 and the shutdown, but not as hard a hit as originally feared.
Receipts fell 8.1 percent compared to May 2019, a drop of $69 million, leaving the fund with monthly revenue of $781 million, the state budget office reported Wednesday.
Revenue for the roughly $11 billion General Fund that pays for most state government services is down 1.8 percent for the fiscal year that ends June 30. However, that puts it on a better track than the revised forecast issued May 22 by the state’s Consensus Forecasting Group, which predicted a 3.5 percent revenue decline for the full fiscal year.
There are several reasons for the relatively good news, state budget director John Hicks said in a news release.
Although hundreds of thousands of Kentuckians have lost their jobs during the novel coronavirus pandemic, many of those people are having taxes withheld from their jobless benefits, which helped prevent a loss in individual income tax collection. Also useful in that category, Hicks said, the state postponed the income tax filing deadline from April 15 to July 15, so fewer income tax refunds have been owed by the state for now.
Individual income tax collection rose 12.4 percent over May 2019 levels, to $344 million, Hicks said.
By comparison, as the economy froze because of the shutdown, collections fell for sales and use taxes, corporate income taxes, property taxes and coal severance taxes. There were slight increases in revenue from the cigarette tax and the Kentucky Lottery.
With fewer Kentuckians buying vehicles or driving during the shutdown, Road Fund receipts fell 33.4 percent as compared to May 2019, with monthly revenue of $95.8 million.
Hicks said there were declines in every revenue source that supports the Road Fund, including the gas tax, vehicle taxes and licensing and vehicle registration fees. The Road Fund pays for state transportation projects, primarily roads and bridges.
