General Fund, Road Fund off to strong start to fiscal year

Fiscal year 2025 gets off to good start

(Story Courtesy of Kentucky Today)

FRANKFORT, Ky. (KT) – Both Kentucky’s General Fund and Road Fund accounts got off to a good start in the fiscal year that began July 1, with substantial increases over a year ago, according to a report released by the State Budget Director’s Office on Monday.

General Fund receipts for July, the first month of Fiscal Year 2025 (FY25), totaled $1,294.4 million, a 12.2 percent increase compared to July 2023 receipts. 

The official revenue estimate for FY25 calls for revenue to increase 0.1 percent compared to FY24 actual receipts. Therefore, receipts can decline 0.9 percent over the remaining eleven months of the fiscal year and still meet the General Fund revenue estimate. 

State Budget Director John Hicks stated, “General Fund revenues posted substantial growth primarily in the corporate income tax, which accounted for most of the growth compared to July 2023. Sales tax receipts were flat and individual income tax receipts are affected by a 11.1 percent reduction in the tax rate, from 4.5 to 4.0 percent.”  

One interesting note on the General Fund: Income on investments increased 77.8 percent to $37.6 million --the largest monthly total ever recorded.

Road Fund revenues for July totaled $163.5 million, a 14.6 percent increase compared to last July.  The official Road Fund revenue estimate for FY25 calls for revenue to decline 2.9 percent compared to FY24 actual receipts.  Based on the first month’s receipts, revenues can decline 4.3 percent for the rest of the fiscal year and still meet the official estimate. 

Among the major categories:

--Motor fuels tax receipts grew 8.0 percent.

--Motor vehicle usage tax rose 24.2 percent.  

--License and privilege taxes posted growth of 5.3 percent.

Hicks says he expects motor fuels tax receipts to decline starting with August receipts, due to a 2.3 cent tax rate decrease that went into effect July 1. Motor fuels tax collections from July are due to the state in the month of August.