Revenue into the state’s general fund exceeded estimates during the 2015 fiscal year, leaving Kentucky with a $165.4 million budget surplus, state officials announced on Friday.
Kentucky’s general fund receipts rose for the fifth consecutive year primarily due to more money collected from income and sales taxes.
Gov. Steve Beshear applauded the news in a statement, saying that the growth was proof that Kentucky was moving in the right direction.
“In January I told lawmakers that Kentucky was back with a vengeance, and today’s news of the more than 5 percent growth in general fund revenues for FY 15 is further proof our momentum continues to accelerate,” Beshear said in the statement.
The general fund grew by more than 5 percent for the first time since 2011, according to state budget officials.
Last year, Kentucky had a $91 million shortfall that led Beshear to cut spending. (Though total revenues increased, the growth was still below estimates in 2014.)
Among the state’s taxes this year: revenue from the income tax had the largest gain from the 2014 fiscal year, increasing $320.2 million. Sales and use tax revenue grew by $136.2 million.
State Budget Director Jane Driskell said the report suggests the economic recovery was stronger than predicted when officials made revenue estimates in December of 2013.
“Revenues picked up momentum as FY15 progressed – and we remain confident that FY16 will continue with positive momentum,” Driskell said in a statement on Friday.
Jason Bailey, executive director of the Kentucky Center for Economic Policy, said the budget surplus isn’t enough to cover growing problems, including the state’s pension woes.
“This year’s growth is in part because of a one-time bump in income taxes that’s unlikely to be repeated next year,” Bailey said in a statement. “Kentucky won’t be able to grow our way out of our budget hole, but only through meaningful tax reform that generates more revenue to move Kentucky forward.”
Revenue into the state’s road fund was $20 million less than expected, primarily because the state is reaping less money from the gas tax as a result of low gas prices.
Also, receipts from the state’s coal severance tax fell by 8.7 percent to $180.3 million, the lowest since the 2004 fiscal year.