We recently closed the books on the revenue side of the 2011 Fiscal Year, and the numbers are worth touting:
In short, while growth was predicted during the year, revenues grew significantly more than everyone expected.
In fact, the rate of growth is the highest in Kentucky since the 2006 Fiscal Year, and it reflects the first rise in General Fund receipts in three years.
For the fiscal year that ended June 30 – Fiscal Year ’11 -- General Fund receipts totaled $8.759 billion. That’s 6.5 percent higher than Fiscal Year ’10. It’s also $166.1 million – or 1.9 percent – higher than the official revised revenue estimate.
Now, some of that money -- $31.1 million – represents excess severance taxes that by law must be redistributed to local governments, and it will be.
Take that away, and unbudgeted excess revenues for Fiscal Year ’11 are $135 million.
The enacted budget directs that this surplus can be used for two things – what’s called “necessary government expenses” and the Budget Reserve Trust Fund.
After we close the books on the expenditure side, which we’ll do later this month, we will be putting more than $100 million into the state’s Rainy Day Fund.
The last time that happened was 2007.
To me, that is a very encouraging sign, especially when compared to other states.
We have noted many times over the past three years that while the national recession has forced us to make cuts and make hard decisions to balance our budget, Kentucky has weathered the storm better than many other states.
Kentucky is one of a minority of states that will exceed pre-recession FY ’08 revenues in FY ’11.
That’s a testament to our diverse economy and resilient tax base.
It’s also worth noting that revenue collections showed solid growth in each of the four quarters of the fiscal year – 4.4 percent in the first quarter … 6.3 percent in the second quarter ... 5.2 percent in the third … and an incredible 9.6 percent in the fourth.
As the press release shows, much of the growth came in the area of individual income taxes and sales and excise taxes, as consumer spending rebounded. Corporate income taxes also rose significantly.
In the separate Road Fund, total revenues in FY ’11 were $1.339 billion, an increase of 11 percent – or $132.2 million – from the year before.
Both of the primary revenue streams – motor fuel taxes and motor vehicle usage taxes – were significantly higher.
The Road Fund ended the fiscal year with $73 million in revenues in excess of budgeted levels. $27.9 million of that amount will be distributed to local governments as required by statute, leaving excess revenues of $45.1 million.
When we close the books on the expenditure side, the Road Fund surplus will be deposited into the State Construction Account pursuant to the enacted budget. The funds will be available for certain projects authorized in the Six-Year Road Plan.
The bottom line is that while the economic picture remains challenging with regard to our families, our businesses and the ongoing mission of state government, there continues to be clear signs of economic recovery.
Balancing the budget will continue to be a challenge for the foreseeable future, and we continue to work feverishly to find everyone a job who needs a job.
But today shows we’re headed in the right direction.