State revenues for August show first decline in 15 months

FRANKFORT — State revenues were down 3 percent from the previous August, the first time revenues have decreased in the past 15 months.

State officials released numbers Friday showing that revenues for August were $623 million compared with $642 million in August 2010. Overall, general fund revenues — used to pay for the bulk of state services — have increased 1.9 percent for the first two months of the new fiscal year, which began July 1, over the previous year.

The state has had to make cuts to state services over the past three years as revenues declined. But the past year and a half saw revenues — taxes and other fees — beat the previous year, signaling a reversal in the state's fiscal fortunes.

Mary Lassiter, the state budget director, said it's too soon to say if the August numbers are indicative of a tapering off of the state's economic recovery.

"Aside from some minor timing differences in the property taxes, growth in the major taxes tapered off in August," Lassiter said. "While one month doesn't make a trend, we will closely examine September receipts to see if the August decline is indicative of an underlying weakness."

The state's official revenue forecast — what state legislators rely on to write the two-year budget — calls for a modest revenue increase this fiscal year of 1.3 percent over last year. Revenues need to grow only 1.2 percent for the remaining months of the fiscal year in order to meet that revenue projection.

Individual income taxes decreased 2.1 percent compared with August 2010, state numbers show. Corporate income taxes stayed about the same. Property taxes were down 23.6 percent from the previous August.

The state's Road Fund — which is used to pay for transportation projects — did continue to increase over the previous year, state officials noted. Revenues for August were $134 million, a 5.4 percent increase over the previous August. The Road Fund has grown over the past 14 months.