FRANKFORT (AP) — Kentucky General Fund revenue declined sharply in February, largely due to a weak performance by the state’s income tax, a state official said Monday.
Budget Director Jane Driskell said collections for the month were down 5.2 percent, costing the state nearly $30 million.
Individual income tax revenue fell by 14.1 percent in February. Driskell said that “primarily was due to efforts by Kentucky’s Department of Revenue to fulfill refund requests in a timely manner.”
Kentucky had a flood of income tax refund requests in February, Driskell said, causing a decline in overall revenue.
Cigarette tax collections also were down by 14.4 percent. And coal severance tax revenue dropped by 24.5 percent.
Gains in several revenue sources, including sales tax, that increased by nearly 1 percent, weren’t enough to offset the losses.
Corporate income tax receipts rose by 41 percent. And property tax collections were up nearly 41 percent.
Kentucky is still trying to rebound from an economic recession that hit the state budget hard. Gov. Steve Beshear and lawmakers cut the budget by about $1.6 billion. An offer of amnesty to delinquent taxpayers generated fast cash that bolstered revenue reports in January.
The amnesty offer allowed delinquent taxpayers in Kentucky to pay up without fear of prosecution.
The decline in income tax revenue in February followed a major increase in January. Individual income tax collections rose by more than 35 percent in January and corporate income tax receipts rose nearly 83 percent as delinquent taxpayers wrote checks to the state treasury.
Kentucky has taken in more than $50 million from the tax amnesty program.
The latest revenue report showed Road Fund collections were up 3.1 percent in February.
Revenue from the motor fuels tax rose 5.7 percent in February, and collections from motor vehicle usage tax were up 4.4 percent.
Driskell said General Fund tax collections have grown 2.9 percent over the first eight months of the fiscal year. And Road Fund revenue is up 3.2 percent over the period.