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Mon February 11, 2013
Tax Amnesty A Boon To Kentucky Economy
FRANKFORT, Ky. -- An amnesty offer that allowed delinquent taxpayers to pay up without fear of prosecution is being credited with generating a 3.8 percent increase in General Fund revenue in January.
State Budget Director Jane Driskell said individual income tax revenue rose by more than 35 percent and corporate income tax receipts rose nearly 83 percent as delinquent taxpayers wrote checks to the state treasury.
Overall, the state took in more than $838 million in January, a $30 million increase over the same month last year. That increase came despite sharp declines in revenue from some key taxes.
Property tax collections were down 47 percent. Coal severance tax collections were off by nearly 27 percent. Cigarette tax revenue was down 9.2 percent. And sales tax revenue, one of the largest cash generators for state government, was down 2.4 percent.
Kentucky is still trying to rebound from an economic recession that hit the state budget hard. Gov. Steve Beshear and lawmakers cut the budget by about $1.6 billion. The tax amnesty program was an effort to generate fast cash to help bolster this year's budget.
So far, Kentucky has taken in nearly $57 million from the tax amnesty program, slightly exceeding expectations.
"More than 27,000 delinquent taxpayers from all 120 Kentucky counties and all 50 states participated," said Finance Secretary Lori H. Flanery. "This means we have 27,000 more taxpayers who are now compliant and have come clean."
Driskell said January receipts, while troublesome in some areas, met expectations.
"We are pleased with the preliminary results of the tax amnesty program, which has bolstered our receipts over the last several months," she said. "However, we continue to be concerned about the performance of sales and use tax receipts."
Road Fund revenue rose 2.4 percent, largely thanks to growing revenues from the state's fuel tax.
"Road Fund revenues are in line with the internal forecast, which predicts that we will end the fiscal year slightly under budgeted levels," Driskell said.