Closer Look at State Revenues
Money coming into Kentucky’s state accounts recently indicates a positive trend, but an official who studies the figures warns against reading too much into them. For the first six months of the fiscal year, receipts have increased almost four percent. The official revenue forecast for the entire year calls for two point four percent growth. Greg Harkenrider with the Office of the State Budget Director says there’s still reason for concern.
“When you take a first blush at it, you say, hey we’re doing pretty well. If you just look at it on the surface you think we’re well poised to hit or possibly exceed the consensus estimates, which are the estimates that the budget is based on. But, then when you drill down a little bit farther, there’s reason to be cautious,” said Harkenrider.
Harkenrider says Kentucky’s sales and use tax has been flat and there’s been an acceleration of property tax collection. He says tax amnesty funds are included in recent count.
“So, we had a lot of people take advantage of that amnesty period, to get right with the government. But, that just means there’s some one time money comingled in with the November, December receipts,” added Harkenrider.
Harkenrider says, in some states, taxes on car sales go into the base. In Kentucky, the motor vehicle usage taxes go into the road fund category. In addition, he says, compared to many other states, the Commonwealth has a fairly narrow sales tax base.