October Revenues - Mixed Bag

The Office of the Budget Director released the October Tax Receipts for the General Fund and Road Fund today. General Fund revenues took a slight dip of 0.8%, while Road Fund revenues saw strong 13.2% growth. You can download the full press release and receipts report HERE. A few highlights:

- October is the 4th month in the Fiscal Year and the General Fund revenues have been down twice in these four months, August and now October. That being said through 4 months of this fiscal year General Fund receipts are up 3.5% YTD and only have to increase 0.3% over the next 8 months to meet the revenue estimate.

- The Road Fund growth through the first four months of this Fiscal Year is 6.6% and actually receipts can decline 3% over the remaining 8 months and still achieve the revenue estimate. However, Budget Director Lassiter predicted even stronger growth through the rest of the fiscal year.

Analysis:

The importance of the revenue receipts is magnified as the General Assembly session approaches in January, when the Governor and the General Assembly will work together to build the next 2 year budget. Not only are state policy makers trying to determine if there will be enough money to fund current programs, but legislators heading into an election year in November 2012 will be looking at possible projects and programs to take back home. Thus everyone is paying a little closer attention to the numbers. 

In this recent Courier-Journal article on Kentucky's current and future budget situation, it is clear that the House and Senate seem to have differing views of how the next budget might look. Certainly with the Governor's Race over the 2012 Session and its largest issue, the budget, will take center stage.