State budget director reports “slight decline” in September General Fund and Highway Fund revenues.

The Office of State Budget Director reported that both General Fund and Road Fund revenues decreased slightly in September 2024 compared to the previous year. The declines were heavily influenced by tax rate cuts. Total General Fund revenues were $1,527.0 million, a decrease of 2.8 percent. During the first three months of fiscal year 2025 (FY25), General Fund revenue increased 1.3 percent.

The official revenue estimate for FY25 assumes General Fund revenues will be substantially in line with actual FY24 revenues or there will be no growth. Based on September results, revenue for the remainder of the fiscal year could decline 0.4 percent and still meet the official estimate.

John Hicks, director of state budget, said: “To date, revenues in the first financial quarter are on target. The annualized effect of a second reduction in the income tax rate and the imposition of a new pass-through tax on corporations have resulted in some timing differences in estimated individual income tax payments and refunds. The salary retention base continues to demonstrate underlying growth in salaries and wages in Kentucky.”

Key customers include:

Road Fund revenues totaled $154.2 million in September, a decrease of 0.4 percent from September 2023 levels. In the first three months of the fiscal year, collections from this fund are down 3.6 percent grown. The Road Fund’s official revenue estimate projects a 2.6 percent decline in revenue for FY25. The expected decline is due to a legislative reduction in the fuel tax rate. The tax rate was reduced by 2.1 cents per gallon, a decrease of 7.6 percent for FY25. Based on year-to-date surveys, revenue for the remainder of the fiscal year could fall 4.7 percent and still be in line with official estimates.

Among the accounts:

To access the report:

Budget Director of the Office of the State