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The Office of State Budget Director has reported both General Fund and Road Fund receipts declined in August compared to last year, while remaining higher overall in the fiscal year

The declines were highly affected by tax rate reductions. Total General Fund collections in August equaled $1,028.2 million, a decline of 4.5 percent. Through the first two months of fiscal year 2025 (FY25), General Fund receipts have increased 4.2 percent. 

The official revenue estimate for FY25 calls for General Fund revenues to essentially equal FY24 actual receipts, or no growth. Based on August’s results, receipts can decline 0.7 percent for the remainder of the fiscal year and still meet the official estimate.

State Budget Director John Hicks said, “The combination of large business tax refunds and the lower income tax rate resulted in a decline in total receipts. The 4.6 percent growth in sales tax and the growth in underlying salaries and wages reflect continued growth in the Kentucky economy.”  

It was the same story for the Road Fund, as receipts for August totaled $164.4 million, a decline of 2.1 percent from August 2023 levels. Through the first two months of the fiscal year, collections in this fund have grown 5.6 percent.

The official Road Fund revenue estimate calls for a 2.6 percent decline in receipts for FY25. The expected decline is due to a statutory reduction in the motor fuels tax rate. The tax rate was reduced by 2.1 cents per gallon, a 7.6 percent decline for FY25. The August receipts are the first month of collections with the new tax rate.  

However, based on year-to-date collections, revenues in the Road Fund can fall 4.3 percent for the remainder of the fiscal year and still meet the official estimate.