State budget director says revenue for 2020 sees small rebound
Since the start of the fiscal year in July, Kentucky has seen an increase in revenue for the General Fund and in the Road Fund, according to a recent report released by State Budget Director John Hicks.
After the coronavirus pandemic caused Kentucky’s economy to shut down and the General and Road Fund saw the worst declines in decades, in August, Kentucky’s General Fund revenue rose by 5.9 percent compared to last year, and is up 6.5 percent since the new fiscal year started in July. Kentucky’s Road Fund is bouncing back at a slower rate, with a revenue increase of 2.9 percent since the start new fiscal year and decline by one percent in August.
“We saw the worst quarterly declines in General Fund receipts from April through June since the Great Recession. Growth rates in July and August have ticked upward supported by substantial federal relief payments to individuals and businesses,” said State Budget Director John Hicks. “Sales and use, and the individual income taxes have been the main drivers of the improvement in collections. Total General Fund collections have increased $106.1 million in July and August over the prior year with sales and individual income taxes accounting for all of the increase. Currently, the primary revenue concern is keeping up the momentum in economic activity in spite of the expiration of much of the federal fiscal policies designed to help the economy. Without another round of federal fiscal stimulus, it will be difficult to maintain the growth in collections we have seen thus far in FY21.”
The budget office estimates the General Fund can decline by seven percent for the remainder of the fiscal year and still meet the official estimate. However, the Road Fund must increase 3.6 percent for the remainder of the fiscal year to meet the estimate.