New data released by the state’s budget office suggest that Kentucky’s General Fund isn’t growing fast enough, and could lead to another budget shortfall.
July receipts show that Kentucky brought in about $706 million in July, a 2.2 increase over last year. But Jason Bailey, director for the nonpartisan Kentucky Center for Economic Progress, says that the sluggish growth won’t be enough to meet official revenue projections.
“2.2 percent growth for July, which is better than zero, but still lower than what we need for the year which is about 3.6 percent to avoid another budget shortfall,” said Bailey.
“We’re seeing slow growth. We’re not even seeing the modest growth that was predicted in the official forecast that the budget was built on. That’s why we had a shortfall in the year that just ended, and that’s why we could be facing another shortfall.”
The data shows that while income and sale tax receipts grew by single digits, returns on corporate and property taxes were down 64 and 45 percent, respectively.
Governor Steve Beshear recently plugged a $90.9 million shortfall in the previous year’s budget that was chiefly caused by a sharp decline in individual income tax receipts.