FRANKFORT, Ky. (May 6, 2021) – As the commonwealth prepares to report April receipts on Monday, Gov. Andy Beshear said preliminary data shows April 2021 logged record-breaking gains in sales and motor vehicle usage taxes.
Sales tax receipts in April were $486.5 million, an all-time monthly high. They were more than 40% higher than last April. Motor vehicle usage tax receipts hit over $64 million, producing an all-time record for this tax type in the road fund.
“This positive news is the fruit of putting politics aside when it came to defeating the coronavirus. It turns out that making decisions based on saving the most lives is also the best way to safeguard our livelihoods and economy,” Gov. Beshear said. “As tough as these past 14 months have been, now is when we begin to reap the rewards of our sacrifices and investments. Now is when we surge to our ultimate victory over COVID and embrace our place as leaders in the post-COVID economy.”
The Office of the State Budget Director predicts that April’s sales tax collections, which reflect March sales, were supported by the $1,400 stimulus checks and February’s weather likely delaying some purchases. Sales tax receipts have risen 9.5% for the 10 months of fiscal year 2021.
“The dramatic increases are not just in comparison to the prior year COVID-suppressed receipts but in comparison to any prior periods in history,” the Governor said.
The money will be added to the current fiscal year general fund, which is estimated to have more than $586 million in surplus and a $12 million surplus in the road fund. The state was already on pace to end the current fiscal year with over a billion dollars in our rainy day fund – the most money ever in a rainy day fund in Kentucky.
Yesterday, the Governor announced that one of the big three credit rating agencies, Fitch Ratings, improved the state’s financial outlook to stable, reflecting the commonwealth’s solid economic recovery from the pandemic.
The new rating highlighted how Kentucky’s employment recovery through March has been slightly ahead of the national pace. Additionally, the report notes significant progress in addressing the state’s pension contribution shortfalls and making full actuarial contributions for all systems as of fiscal year 2019.
In addition, the Governor pointed to analysis last year by Goldman Sachs showing that if everyone in America was required to wear face coverings in public, it could save the U.S. economy from losing 5% of the Gross Domestic Product. Gov. Beshear noted Kentucky’s Gross State Product alone is more than $10 billion.
Even with the pandemic, the Governor announced 270 economic development projects that will create more than 8,000 new jobs. The average pay for those jobs is one of the highest in years. He supported our rural communities with more than $124 million in investment, for 160 projects that are helping to diversify regional economies.
The Governor also distributed $1.6 billion in federal Coronavirus Aid, Relief and Economic Security Act (CARES) funding. This included $40 million to create a Food and Beverage Relief Fund to help our local restaurants and bars that have been greatly impacted.
The state is also preparing to create more than 14,500 new jobs through a bipartisan agreement reached by lawmakers and his administration during the 2021 regular session. Nearly $1.3 billion in American Rescue Plan Act funds will be used to boost the state’s economy by expanding broadband, delivering clean drinking water and building new schools.
With 1.8 million Kentuckians now vaccinated, the Governor urges every Kentuckian to be vaccinated so we can save lives, end the pandemic and continue our economic momentum in the post-COVID world.