FRANKFORT — Kentucky started its fiscal year with a 2.2 percent increase in General Fund revenue in July, state budget director Jane Driskell reported Monday.
The General Fund, which pays for most state programs, collected $705.9 million in July.
Driskell said the General Fund's growth is "a positive sign, especially since our two largest taxes — individual income and sales tax — grew at robust levels of 5.9 percent and 7.6 percent, respectively."
"Our expectations are that the underlying economic momentum continues to build," Driskell said.
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The official revenue estimate for fiscal year 2015 calls for revenue to increase 3.6 percent compared to last year's actual receipts. Based on July's results, General Fund revenue must increase 3.7 percent for the remainder of the fiscal year to meet the official estimate.
When the last fiscal year ended June 30, Democratic Gov. Steve Beshear had to plug a $91 million shortfall in the state's $9.5 billion budget after a year of sluggish collections on state income taxes.
He did that by dipping into budget accounts of several state agencies, taking $21.2 million from the state's $98.2 million "rainy day" fund and cutting $3 million in state spending.
Among the state's major accounts in July, individual income tax receipts rose 5.9 percent, sales tax revenue grew 7.6 percent, cigarette tax collections rose 2.3 percent and the payment to the state from the lottery increased by 3.1 percent.
On the negative side, corporation income tax collections fell 64.6 percent. The state attributed that to a large one-time payment received in July 2013.
Coal severance tax revenues declined 14.8 percent and property tax receipts fell 45 percent. Driskell said only a small share of property tax receipts are received in July.
Driskell also announced that the Road Fund, which pays for transportation projects, collected $125.4 million in July, an increase of 5.1 percent compared to last July.
The official revenue estimate for this new fiscal year calls for Road Fund revenue to decline 0.9 percent compared to last year's actual receipts. Based on July's receipts, revenue can fall 1.4 percent for the rest of the fiscal year and still meet budgeted levels.