Covering Frankfort

Nov 9, 2012 4:47 PM

Income Tax Revenue Boosts State Budget In October

FRANKFORT (AP) - Income tax revenue rose in Kentucky in October while sales tax receipts declined sharply, sending mixed signals about economic recovery in the state.

Budget Director Mary Lassiter said Friday that General Fund revenue rose by 3.7 percent for the month, largely thanks to growth in individual and corporate income tax receipts. At the same time, Lassiter said she's concerned about lackluster collections from the state sales tax and from the coal severance tax.

"Revenues remain on pace to meet budgeted levels, but we are closely watching several accounts, which have recently underperformed," Lassiter said in a statement.

Individual income tax collections rose 3.7 percent for the month to nearly $303 million, and property tax collections skyrocketed by nearly 90 percent to $32.5 million.

Sales tax collections fell by 2.5 percent to $297 million. And coal severance tax revenue nosedived by 41 percent to $16.7 million, largely because coal sales declined in a slumping market.

Revenue from the state's cigarette tax, which had been in a free fall, actually rose in October by 5.4 percent to just over $20 million. Cigarette tax revenue began a decline when Kentucky approved a 30-cent-per-pack tax increase some three years ago.

Road Fund revenues rose 19 percent to $135.9 million in October, largely because of rising vehicle and fuel sales. Lassiter said the spike helped the state to rebound from lower-than-projected revenues since July.

The fuel tax generated more than $76 million in October. The motor vehicle license tax accounted for another $42.4 million.

"October's surge in Road Fund receipts brings year-to-date revenues back in line with projections used in the budgeting process," she said.

Kentucky continues to operate under a tight budget. Lassiter, as the governor's point person on financial matters, has led the state through multiple budget cuts since 2008.

Nearly all state government programs and services have been affected.

(Copyright 2012 The Associated Press. All rights reserved.)


Most Popular

Top Videos

1 2 3 4