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The State Department’s budget director reported Tuesday that general fund revenues were down 6.5% in February compared to February of last year.
Collections for the month were $1,007.6 million. In February, sales, gross income, property taxes, and miscellaneous taxes increased slightly, but personal taxes and business taxes decreased significantly. Currently, income has increased by his 3.0% in the first eight months of fiscal year 2024.
Official General Fund revenue projections call for a 2.7 percent increase in revenue for the fiscal year. Based on year-to-date tax collections, revenue would need to increase by 2.1% for the remainder of the year to meet official estimates.
“Due to tax rate cuts and timing issues, the year-over-year decline in February was concentrated in personal income taxes,” said state Budget Director John Hicks. “The income tax rate for February 2024 was 4.0 percent compared to 4.5 percent in February 2023. The other part of the decline is that some receipts normally received in February will be This is due to the fact that it was received in late January.”
“In January and February, withholdings decreased a combined 9.0%, while personal income tax rates decreased by 11.1%. In Kentucky, wage growth continues to outpace personal income tax rate reductions. , wages and salary income continue to increase.”
Some of the major accounts include:
• Sales and use tax revenues increased 2.0%. The year-to-date growth rate for this account is currently 5.4%. Sales and use tax collections have increased for 22 consecutive months.
• Combined corporate income and LLET tax revenues decreased $7.8 million compared to February 2023. LLET income increased by $8.3 million to $11.8 million, but corporate income tax collections decreased by $16 million due to increased refunds. For the year, total revenue decreased 8.9%.
• Personal income tax collections decreased by 18.1%, or $87.2 million, in February. Among the major components of taxes, estimated payments increased, withholding taxes decreased by 16.9%, net income decreased by $19.7 million, and trustees decreased by $0.7 million. The tax rate has been reduced from 4.5 percent to 4.0 percent from January 1, 2024. Collections increased 0.1 percent in the first eight months of the fiscal year.
• Property tax collections increased 21.2% during the month due to increased unpaid and delinquent accounts as well as public service property tax collections. This year’s total property tax revenue increased by 2.7%.
• Tobacco tax revenues fell 6.3% in the month and 9.8% year-to-date.
• Coal severance tax revenue fell 13.7% in February and 21.4% through the first eight months of the fiscal year.
• Investment interest increased 32.4% to $21.7 million.
Highway fund receipts increased 5.2% in February, bringing total collections to $140 million. Total revenue increased by 6.5% in the first eight months of fiscal year 2024. Motor fuel collections increased by 14.4% and motor vehicle use tax collections increased by 13.0%.
License and registration collections fell slightly due to delays in deposits due to updates to Kentucky’s vehicle information system. The Road Fund’s official revenue forecast predicts his revenue will increase by 7.3% for the financial year. Based on year-to-date tax collections, revenue would need to increase by 8.8% for the remainder of the year to meet official estimates.
Check the report at www.osbd.ky.gov.
state budget director
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