Welcome

Thank you for visiting Paducahsun.com, online home of The Paducah Sun.

Calendar
June 2012
S M T W T F S
27 28 29 30 31 01 02

Click here to submit an event.

State ends 2014 with budget shortfall

BY ADAM BEAMAssociated Press

FRANKFORT - Kentuckians are buying more stuff, they just aren't paying as much in taxes.

That's why the state ended the 2014 fiscal year on June 30 with a $90 million shortfall in its general fund.

Sales taxes - the extra 6 percent consumers pay on their purchases - were up $109 million, the largest increase of any state funding source.

But the state's largest revenue source - individual income taxes - grew less than 1 percent compared to last year - about $63 million less than officials had planned. Even during the depths of the recession the past three years, Kentucky's income tax collections grew by 8.3 percent, 2.8 percent and 6 percent, respectively.

"The sales tax was our hero," State Budget Director Jane Driskell said. "The largest culprit was the individual income tax."

The reason, Driskell said, is what budget wonks refer to as the "April Surprise." In 2012, when the nation was barreling toward the fiscal cliff - the combination of automatic tax increases and spending cuts that had economists worried - most of the country's wealthiest individuals sold a lot of their assets to avoid a federal tax increase.

The result was in April 2013 - when most people file their state tax returns - states saw big jumps in individual income tax collections. Kentucky's income tax collections rose 5.6 percent in April 2013, or $21.9 million. But in April 2014, it meant the wealthy paid less taxes. Kentucky's individual income tax collections fell 8.7 percent in April 2014, or $36.7 million. "We took some of that in consideration as other states did, but it seemed to be more significant than we originally thought," Driskell said.

And it has affected states across the country, according to Scott Pattison, executive director of the National Association of State Budget Officers.

"You usually have a fairly high percentage of income tax paid by the wealthiest individuals living in the state," Pattison said. "But we think we've worked through that cycle. The fiscal cliff impact is kind of done. As we move forward it will stabilize."

Kentucky's road fund was also short about $22.2 million. The state made more money from the gas tax because the tax automatically increased as the wholesale price increased. But it was not enough to offset the fact that people are buying less fuel.

It's unclear how the shortfall will affect road projects. The state has already delayed $185 million worth of federal construction projects - including the widening of a dangerous section of I-65 near Elizabethtown - because of a looming deficit in the federal Highway Trust Fund.

Democratic Gov. Steve Beshear has not said how he plans to make up for the shortfalls. While state officials know how much money the state collected during the last fiscal year, they still don't know how much the state spent. Driskell said officials should know that later this month.

Comments made about this article - 0 Total

Comment on this article

Your comment has been submitted for approval
captcha ee6cd9cc91c24914bb38df6a5374c50f
Top Classifieds
  • Labrador Pups $500 839-1198 Details
  • HAVANESE PUPS AKC Home Raised, Best H ... Details
  • House for SaleAurora, KY2 Bdr, Liv RM ... Details
  • Lower town Condo w/ garage, Leslie He ... Details
  • SEEING is believing! Don't buy p ... Details
  • Hill Crest SubdivisionCorner Lot180x ... Details
  • Beautifully &Totally Renovated Co ... Details
  • Details
  • AUTOMOVER SPECIAL6 lines - 14 dayson ... Details
  • Old Ford Backhoefixable or for parts2 ... Details
  • 2007 NissanAltima Hybrid147,000 miles ... Details
  • White 2013 Chevy Impala LT 70k mls $8 ... Details
  • 2011 Outback Keystone Super Lite 277- ... Details
  • Coachman Pop-Up Camper $1800 270-744- ... Details

Most Popular
  1. Forbes ranks Louisville No. 1 in manufacturing resurgence
  2. City to host fire training program
  3. Crowd turns out for commission meeting
  1. Preliminary autopsy: Wreck killed Ford
  2. Crowd turns out for commission meeting
  3. Fatal drug overdoses surge statewide, locally
  1. Forbes ranks Louisville No. 1 in manufacturing resurgence
  2. City to host fire training program
  3. Crowd turns out for commission meeting
Discussion

Check out these recently discussed stories and voice your opinion...