Kentucky economy slowly showing signs of recovery

Two positive figures released this week indicate the Kentucky economy is slowly rebounding from the recession: a lower unemployment rate and higher tax receipts.

Kentucky’s unemployment rate fell to 10.2 percent in March, down from 10.4 percent a month earlier.

The state added 11,600 jobs in the month, as “Kentucky’s economy showed signs of improvement,” said Justine Detzel, chief labor market analyst for the state Office of Employment and Training.

The state’s unemployment rate in March continued to outpace the national rate of 8.8 percent, which declined from 8.9 percent in February. Since February 2009, Kentucky’s jobless rate has been below 10 percent just once, in July 2010.

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The Office of State Budget Director reported Monday that March’s General Fund receipts grew 3.7 percent compared to March of last year, an increase of $23.8 million. Total revenues for the month were $675.8 million, compared to $652.0 million during March 2010.

Receipts have now grown 5.3 percent for the first nine months of FY11. The enacted budget calls for 4.5 percent revenue growth for the entire fiscal year. To meet the official revenue estimate, receipts must grow 2.2 percent over the last three months of the fiscal year.

The most recent internal revenue estimate predicted revenues would grow 4.9 percent for the year. Road Fund receipts for March totaled $110.3 million, a 6.9 percent increase over March 2010 levels. Year-to-date receipts for FY11 are up 12.3 percent.

State Budget Director Mary Lassiter noted General Fund receipts have posted 11 consecutive monthly increases, a strong signal that the Kentucky economy is recovering from the recession.

“We are seeing tangible signs of recovery in state tax receipts, as evidenced by the performance of sales tax in March and for the year as a whole. However, income tax season is in full swing and these receipts can be very volatile. Overall, we project to end the year slightly above originally budgeted levels, and will prepare an updated quarterly revenue outlook later this month.”

Categories: Economy, Taxes & Budget

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