The first hard evidence of how much the coronavirus has affected Kentucky’s economy came out Wednesday, as the State Budget Director’s Office released state revenue figures for April.
General Fund receipts for April dropped precipitously, not only due to the impact of the novel coronavirus, but because of delaying the income tax filing deadline. Collections fell 33.6 percent, compared to April of last year.
Nearly 90 percent of the decline was from individual and corporate income taxes. Total revenues for the month were $857.0 million, compared to $1,289.9 million received during April 2019. Receipts have now fallen 1.2 percent for the first 10 months of FY20.
The Office of State Budget Director recently released an unofficial General Fund revenue estimate for FY20 that called for a revenue shortfall of between $318.7 million and $495.7 million.
“The economy has been hit hard by policies necessary to limit the spread of the virus and to save lives,” said State Budget Director John Hicks. “The decline in individual income tax receipts was also greatly influenced by the movement of the tax filing deadline from April 15 to July 15. Withholding income tax receipts and sales tax receipts are most indicative of the effects of the economic conditions, declining by 7.5 percent and 6.4 percent, respectively.”
Road Fund receipts fell 30.1 percent in April with total collections of $101.7 million. This is $43.9 million less than what was collected last year.
The primary contributors to the drop, according to Hicks, were “the usage tax from vehicle sales falling by 60.1 percent and motor fuels tax by 11.8 percent.”
Year-to-date collection now stand at -1.4 percent. The recently released unofficial revenue estimate calls for Road Fund revenues to decline between 8.3 percent and 13.3 percent in FY20 which would result in a revenue shortfall of between $116.4 million and $194.6 million.
“Looking ahead to the last two months of the fiscal year, the economic consequences of job losses, impacts on business, and significant curtailment of consumer activity are expected to continue,” Hicks said. “The Consensus Forecasting Group will be revising the FY20 official revenue estimates for the General and Road Funds in May. The new estimate will guide the actions of the Governor in balancing the current year’s budget.”
–30–
Written by Tom Latek. Cross-posted from Kentucky Today.