Budget wizards are closing out their 2023 – 2024 fiscal year with a report that shows positive economics for Kentucky’s general fund and road fund.

John T. Hicks, the State Budget Director, reiterated to lawmakers on the interim joint Appropriations and Revenue Committee the good news.

“You don’t see that number in history very often,” Hicks told committee members as he showed the committee nearly $200 million more in the road fund than initially estimated. Both motor fuels and motor vehicle usage revenues were at historic highs.

Senate Appropriations and Revenue Chair Chris McDaniel, R-Ryland Heights, said the results are thanks to policies enacted over the past 10 years.

“Over the past decade, we have grown the state’s reserve from $0 to over $5 billion,” said McDaniel “At the same time, we have stabilized and made solvent the worst-funded pension systems in the nation, made historic investments in education, and reduced the income tax from 6 percent to 4 percent. Today, we received word we can take legislative action this January to reduce the state income tax from 4 percent to 3.5 percent, effective in January 2026. Kentuckians know best how to spend their money and do so more efficiently than the government. We are proud to help them and their families keep more of their hard-earned money.”

Some of the differences between the years, Hicks said, are tax rate related; however, even with high loan rates, consumers continue to buy vehicles.

Hicks also credited the legislature’s efforts to build the budget reserve trust fund, specifically the deposit of budget surpluses into the fund. The budget reserve serves as the state’s savings account and exists to prepare it for emergencies, difficult financial times, and opportunities. Investments in the fund have risen from zero less than 15 years ago to more than $5 billion.

“Our approach to crafting the budget is aimed at meeting the state’s needs and identifying areas that we can invest in that provide the greatest return for Kentuckians,” House Appropriations and Revenue Chair Jason Petrie, R-Elkton, added. “We do not budget with the intent of spending every available dollar. Instead, like Kentucky families, created a structural surplus, something we know will be there if and when we need it.”

The committee also heard from the Department of Revenue (DOR) on Wednesday.

Sen. David Givens, R-Greensburg, took time during the meeting to ask the Department of Revenue about data he has requested concerning a fix for impacted Tax Increment Financing (TIF) Districts.

Givens carried legislation during the 2024 session, which would have offered a permanent fix to the issue. The legislature essentially punted impacted TIFs in the state budget with an additional two-year fix.

House Budget Chairman Jason Petrie also asked DOR representatives to send their reply to the committee so they have all the data needed while contemplating a permanent fix. Last month, the committee heard of possible solutions to the TIF.

The KLC Board of Directors voted in June to seek a permanent TIF fix in the upcoming 2025 legislative session.