Kentucky’s Road Fund closed the first quarter of Fiscal Year 2022 with a 3.5% increase, according to Office of State Budget Director Deputy Executive Director Greg Harkenrider.

Thursday, the State Budget Director’s Office presented the latest estimate to the Consensus Forecasting Group (CFG). This team of economists study future projections to help determine the amount of revenue state government can expect.

While fuel consumption across the United States has begun to rebound from lows during the pandemic, forecasts suggest that use will level off, a trend that should impact future results.

Harkenrider reported that the motor fuels tax grew 4.9% in the first quarter, and Kentucky’s motor vehicle usage tax increased 3.8%. September results impacted both of the figures.

Forecasters admit that a considerable amount of federal stimulus dollars Kentuckians received in the quarter “created noise” while they prepared the estimates. However, the group hopes to have more predictable estimates prepared by December’s meeting, when they will make the official estimates that the governor will utilize in the budget submitted to the General Assembly for the 2022 session.

Kentucky road revenues increased in FY 21 but closed below “healthy” levels needed to adequately fund infrastructure essentials across the commonwealth.

The Kentucky League of Cities continues to advocate to modernize the road funding formulas. Since 2009, Kentucky cities have spent 62% more on city streets, but state and federal funding declined more than 4%. Cities maintain more than 10,000 miles of public roadways – streets that are more expensive to build and preserve due to requirements such as curbs and gutters, Americans with Disabilities Act (ADA) mandates, and stormwater drainage.

Harkenrider revealed at Thursday’s meeting that the General Fund grew 20% during the first quarter.

A $225 million legal settlement with Flutter Entertainment, the parent company of PokerStars, propelled the General Fund increase, Harkenrider explained.

He said that the main three tax categories (sales, individual income, and business) collectively grew 12.7% in the time frame.

Sales taxes grew 10.8% in September, closing out the first quarter 9.9% higher. Individual income taxes increased 7.6% in September and 6.5% in the first quarter. Business taxes grew 55.8% in September and 76% during the first quarter of FY 22.