FRANKFORT, Ky. (AP) — In another sign of a strengthening state economy, Kentucky had significant increases in revenue from income taxes in September, the state’s budget chief said Wednesday.
Budget Director Mary Lassiter said total revenue for the month reached nearly $885 million, up from $840 million a year ago.
A 26.1 percent increase in corporate income tax revenue, coupled with an 8.1 percent rise in individual income tax receipts, allowed the state to post an overall 5.3 percent increase in general operating funds for the month. Together, those taxes produced $466 million in September.
The state’s sales tax revenue rose by 1.2 percent, generating $321 million. And lottery revenue was up 9.4 percent to $17.5 million.
Lassiter described the growth in General Fund revenue as “modest” and said it came “despite underlying weakness” in other key taxes.
Property tax collections were down nearly 13 percent. Cigarette tax receipts fell by 14 percent, continuing months of decline as more people opt to quit smoking. And revenue from the coal severance tax dropped another 19 percent because of a downturn in the state’s mining industry.
The cigarette tax produced nearly $20.3 million in September, down by $3.6 million from a year ago.
Road fund receipts also fell for the second consecutive month. Lassiter said revenue from the state’s fuel tax declined by 3 percent in September, the result of motorists reducing travel with gasoline prices nearing $4 a gallon.
“We are seeing an unexpected decline in fuel sales compared to last year,” she said.
Receipts from the state’s motor vehicle tax increased by 3.9 percent in September, but the state had hoped for more. Since July 1, motor vehicle tax revenue is down by 1.5 percent.
“Under performance in these two accounts is concerning since they comprise nearly 85 percent of the total Road Fund revenues,” Lassiter said.
