Kentucky budget hit hard by COVID-19 in April and outlook remains gloomy
COVID-19 and a delayed income tax filing deadline are walloping the Kentucky budget.
State budget director John T. Hicks said Wednesday that April revenue receipts for the state’s General Fund, which pays for most state programs, dropped 33.6 percent, or $432.9 million, compared to April last year.
Hicks said April’s Road Fund receipts dropped by 30 percent, or $43.9 million. He said the usage tax from vehicle sales fell by 60.1 percent and motor fuels tax by 11.8 percent.
The budget director put the blame on the coronavirus and moving the income tax filing deadline from April 15 to July 15.
He also painted a gloomy forecast for the budget.
“Looking ahead to the last two months of the fiscal year, the economic consequences of job losses, impacts on businesses and significant curtailment of consumer activity are expected to continue,” said Hicks.
He said the Consensus Forecasting Group, made up of independent economists, will revise the official revenue estimates for the General and Road funds later this month.
“The new estimate will guide the actions of the governor in balancing the current year’s budget,” he said. The Kentucky Constitution requires a balanced state budget.
Hicks recently released an unofficial General Fund revenue estimate that called for a revenue shortfall this fiscal year of between $318.7 million and $495.7 million.
Hicks said nearly 90 percent of the April decline was from individual and corporate income taxes.
Total revenue for the month was $857 million, compared to about $1.29 billion in April 2019.
The state has taken in 1.2 percent less than expected for the first 10 months of this fiscal year, which began last July 1, said Hicks.
“The economy has been hit hard by policies necessary to limit the spread of the virus and to save lives,” he said in a release. “The decline in individual income tax receipts was also greatly influenced by the movement of the tax filing deadline.”
Withholding income tax receipts and sales tax receipts are most indicative of the effects of the economic conditions, declining by 7.5 percent and 6.4 percent, respectively, he said.
This story was originally published May 6, 2020 at 12:01 PM.
