FRANKFORT -- State revenues saw a sharp increase in March, but with the coronavirus pandemic causing the closing of many businesses in the latter part of the month, don't expect a continuation in April.
The Office of State Budget Director reports last month's General Fund receipts rose 6.8% compared to March of last year, an increase of $56.0 million. Total revenues for the month were $876.1 million, compared to $820.1 million during March 2019. Receipts have now grown 3.9% for the first nine months of FY20.
Road Fund receipts grew 6% in March 2020. Receipts were $127.3 million, $7.2 million more than last March. Through the first nine months of FY20, receipts have increased 2.2%.
State Budget Director John Hicks noted that both General Fund and Road Fund receipts in March mainly reflected economic activity in February, and that the pandemic will have "a profound impact" on the economy and tax collections, which will be seen starting with the April report.
"The temporary suspension of most retail activity and many other sectors of the economy has led to a dramatic increase in claims for unemployment insurance," he said, "which will lead to lower income tax withholding in the coming months."
"These business suspensions will also profoundly affect sales tax revenues as well. Individual income and sales taxes comprise about 77% of General Fund revenues. Essentially the well-being of the state's economy and tax revenue is intertwined with the course of the COVID-19 pandemic, so the upcoming downturn in revenue collections will not abate until the public health crisis improves."
The revenue estimate for the 2020 fiscal year, which was approved by the Consensus Forecasting Group in December 2019, called for 1.6% revenue growth for the fiscal year.
The official revenue estimate enacted by the 2020 Session of the General Assembly reduced that General Fund revenue estimate by $128 million and the Road Fund revenue estimate by $21 million in the state budget bill sent to Gov. Andy Beshear.