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From YouTube: Consensus Forecasting Group (9-25-23)
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B
B
B
You
joined
Eastern,
Kentucky
University
in
1989
and
was
chair
of
that
department,
economics
Department
from
1980
89
to
1997.,
and
he
remained
at
EKU
until
he
retired
ever
since
arriving
in
Kentucky
for
over
three
decades,
Dr
O'connor
served
the
Commonwealth
as
part
of
the
revenue
forecasting
process
from
1989
to
1992
Dr
O'connor
served
on
the
governor's
economic
Roundtable.
B
That
was
an
Advisory
Group
that
assisted
in
the
revenue
estimating
process
at
that
time.
In
1996,
Senate
Bill
59
was
passed
and
had
a
formally
established
a
consensus.
Forecasting
group
and
Dr
O'connor
became
a
member
of
the
CFG
in
1999,
so
he's
been
the
longest
serving
member
of
the
CFG
in
2013
after
Dr
Lynch
resigned
from
the
CFG
as
a
chairman,
Dr
O'connor
assumed
the
chair
at
that
time.
B
C
Just
a
few
remarks
to
add
to
what
Perry
said
very
few
benefits
to
sitting
on
the
CFG
is
not
a
paid
gig
and
but
one
of
the
one
of
the
things
that
always
came
out
in
Dr
O'connor
was
the
sense
of
fraternity
and
camaraderie
that
that
you
all
develop
amongst
one
another
and
and
he
embraced
those
those
Concepts
first
is
his
role
as
a
member
and
then
his
his
role
as
the
chair
in
2013.
C
I'm
sure
everybody
has
their
own
Frank
memory,
he
he
was
a
great
Storyteller
and,
and
he
had
various
and
numerous
insightful
memories
to
share.
My
favorite
memory
was
the
times
that
he
invited
me
up
to
you
EKU.
We
did
a
meet
and
greet
with
some
of
his
students.
One
time
we
talked
for
about
an
hour
and
a
half
on
forecasting
methods
and
a
couple
things
struck
me
won
with
that.
C
He
was
always
eager
to
help
his
students
gain
useful
tools
that
would
help
them
after
their
graduation
and
the
other
thing
that
just
struck
me
was
how
proud
he
was
of
EKU
and
how
how
gracious
of
a
host
he
was
to
anybody
that
would
that
come.
His
way,
the
other
thing
I
remember
the
most
as
a
staff
person
and
a
presenter
to
the
CFG.
C
He
is
very
gracious
with
us
and
he
read
the
materials
ahead
of
time
and
he
always
gave
me
the
professional
courtesy
if
something
was
wrong
in
his
eyes
or
inconsistent,
or
there
was
a
something
that
was
a
perceived
going
to
be
a
glitch
in
the
meeting
he
would.
He
would
call
me
ahead
of
time
and
say
Greg
what
about
this,
and
he
wasn't
about
gotcha
moments.
C
You
know,
saving
up
a
insightful
comment
and
then
springing
it
on
you
in
the
meeting
and-
and
he
was
never
about
that-
it
was
always
about
the
good
of
the
process
and
everything
was
go
to
the
process
over
anything,
personal
or
otherwise.
C
So
he
was
always
able
to
graciously
Garner
a
consensus
and
he
will
be
missed
by
by
staff
here.
Thank
you.
A
All
right
and
if
I
might
just
add
a
few
words
about
Frank
I,
don't
know
I,
don't
remember
when
I
first
met
Frank,
but
it
was
a
long
time
ago
soon
after
I
arrived
in
Kentucky
to
work
at
Center,
College,
probably
a
Kea
meeting
and
after
that
initial
meeting
I
do
know
that
he
was
always
very
kind
and
encouraging
I
wrote
a
few
op-ed
pieces
back
when
we
had
daily
newspapers
and
Frank
would
often
at
the
next
time
we
saw
or
even
by
email.
Send
me
a
note.
I
really
enjoyed
your
piece.
A
Sometimes
he
didn't
agree
with
me,
but
it
was
always
civil
and
I.
Just
felt
like
it
was
just
so
great
to
have
someone
of
his
stature
be
kind
Express,
a
genuine
interest
and
be
kind
and
I
will
miss
him
a
lot
as
and
I'm
sure
other
members
of
the
CFG
would
have
similar
stories.
C
Get
tied
onto
the
first
side,
please
sure
we're
gonna
go
a
little
bit
different
than
the
agenda
I'm
going
to
do
the
first
slide,
then
we're
going
to
trickle
to
the
economy,
the
state
or
the
national
and
state
economies
and
then
I'm
going
to
flip
back
to
the
introductory
slides,
because
they
pertain
a
lot
more
to
revenues
than
they
do
to
anything
else
and
I
want
to
have
revenues
and
then
the
economy
and
then
lose
the
continuity.
So
I'm
just
going
to
start
with.
C
Why
we're
here
today
the
statutes
were
revised
in
the
2023
session,
the
August
15th
planning
estimates.
If
you
remember
on
odd
numbered
years,
which
is
the
numbered
year,
we
would
meet
in
October
or
August
October
and
December.
The
August
estimates
were
the
four-year
planning
estimates.
We
did
the
current
fiscal
year
and
four
years
out,
those
were
eliminated
in
hospital
360.
C
So
we
we
don't
have
to
do
four-year
estimates
which
I'm
thankful
for
the
October
15th
estimates
which,
from
the
prior
statute
were
called
the
preliminary
estimates,
and
we
still
have
preliminary
estimates
that
just
say
we're
moved
up
to
September
30th,
so
no
longer
October
15th
is
the
deadline.
September
30th
is
is
our
new
deadline.
Hence
our
meeting
today
on
the
25th
and
finally,
the
the
the
last
change
that
took
place
was
that
the
official
estimates
upon
which
statutory
leave
the
budget
has
to
be
based
didn't
have
a
date
certain
per
se.
C
In
the
old
statute
it
was
the
15th
legislative
day.
The
custom
was
always
to
do
it
in
December
and
in
fact,
every
every
cycle.
I
remember
we
did
it
in
December,
but
the
section
39
of
Hospital
360
changed
and
made
it
official
that
it
would
be
done
by
December
20th.
C
So
we
have
a
hard
deadline
on
December
20th.
It
was
always
done
in
December
to
accommodate
the
the
workings
of
government
to
let
the
governor
get
his
is
his
budget
out
and
so
forth.
But
now
we
have
a
firm
heart
date
on
December
20th.
So
that's
why
we're
here?
In
September,
instead
of
October
and
with
that
I'm
going
to
delay
the
rest
of
my
introduction
until
after
Dr
Michael
Jones
goes
through
the
economic
forecast
that
we'll
consider
today.
D
Good
morning,
I
mean
good
afternoon.
Unfortunately,
turning
50
has
caused
me
to
now
have
to
use
reading
glasses,
so
life
life
can
be
cruel,
I
must
say
so.
Well,
it's
wonderful
to
see
everybody
I
really
want
to
say
I
appreciate
everyone's
heartfelt
words
about
Frank.
He
was
a
very
caring
and
generous
man,
and
his
presence
will
certainly
be
missed,
so
so
I'm
going
to
discuss
the
national
and
state
Outlook.
This
is
based
upon
the
s
p
Global
forecast
that
was
published
in
early
August.
D
D
That
is
a
little
below
trend
for
those
out
years,
but
the
1.9
percent
is
a
recent
revision
upwards
from
s
P's
earlier
estimates
that
have
occurred
during
the
end
of
fiscal
23
and
now
that
we're
in
fiscal
24.,
a
significant
portion
of
that
is
associated
with
a
very
strong
surge
in
business,
fixed
investment
due
to
the
chips
Act.
D
They
correctly
point
out
that
on
an
annualized
basis
in
since
2010,
we
have
never
had
more
than
an
annualized
20
billion
dollars
in
ongoing
investment
properties
being
built,
and
we
are
now
at
well
over
100
billion
dollars
worth
of
properties,
part
of
the
chips
act.
It's
not
just
the
equipment,
it's
also
the
facility
itself
and
rather
than
a
10
income
tax
credit.
D
It's
a
25
income
tax
credit,
as
you
might
imagine,
given
the
broad
nature
of
what
is
covered
and
the
richness
of
the
tax
credit
firms
have
certainly
responded,
and
we
have
seen
a
tremendous
amount
of
investment.
They
assume
the
Federal
Reserve
will
maintain
their
federal
funds
rate
in
the
5.5
to
5.75
percent.
D
All
the
way,
through
the
second
quarter
of
fiscal,
24
and
they're,
going
to
continue
to
further
reduce
the
current
balance
sheet,
they're,
assuming
that
the
growth
rate
in
payrolls
will
be
declining,
and
we
will
be
switching
over
to
negative
growth
in
fiscal,
25
and
26.
and,
let's
be
honest,
they
are
assuming.
We
need
to
have
much
more
losses
in
the
labor
market
for
the
FED
to
be
able
to
achieve
their
goal
of
two
percent
pce
growth,
the
fed's
preferred
measure
of
inflation.
D
We
have
been
having
positive
payroll
reports,
the
most
recent
payroll
report,
which
of
course
came
out
after
this
report
continued
to
show
positive
numbers
so
they're
expecting
those
positives
to
get
smaller
and
smaller
and
transition
to
losses.
As
we
get
farther
out
in
the
forecast,
we've
had
declines
from
the
recent
highs
for
West
Texas
intermediate
oil
prices,
they're
expecting
seven,
three,
seventy
three
dollars
and
ninety
cents
a
barrel
for
fiscal
24,
with
a
slight
increase
to
just
shy
of
75
dollars
and
fiscal
25,
and
just
a
little
over
80
dollars
in
fiscal
26..
D
Now,
as
you
might
imagine,
that
has
to
compare
to
our
first
our
optimistic
scenario.
Now
this
is
unusual:
it's
only
weighted
by
20
percent
that
might
be
one
of
the
lower
weightings,
I've
seen
on
an
optimistic
scenario
from
s
p
Global
in
quite
some
time.
The
GDP
growth
is
much
stronger,
2.4
percent
in
fiscal
24
with
Trend
level
growth
that
would
be
1.2
and
1.5
percent
in
the
in
the
control
forecast.
D
D
D
It's
a
pessimistic
scenario.
Weighted
at
25
is
more
pessimistic
to
say
the
least.
Russian
Ukraine
conflict
increases
GDP
growth
declines
by
one
point:
I'm
sorry
declines
to
1.3
percent
I
apologize
for
that
mistake
in
fiscal
24
and
0.6
in
fiscal
25.
Again
that
compares
to
1.9
and
1.2
percent
in
the
control
forecast
for
those
years
respectively.
D
They
assume
that
the
recent
turmoil-
Silicon
Valley,
Bank
and
others
leads
to
significant
tightening
lending
standards
and
reduces
credit
expansion,
the
consumer
spending
growth,
Slows
To,
1.3
percent
and
24
and
0.9
percent
and
25
that's
compared
to
2
percent
and
1.5
percent
in
the
control
forecast.
Non-Farm
employment
decreases
by
1.5
percent
25.
It's
a
0.1
percent
in
the
control
forecast
with
manufacturing
employment
decreasing
by
4.4
percent
in
fiscal
25
versus
the
2.7
percent
that
you'll
see
in
the
control
forecast
so
again,
much
stronger
declines
in
the
pessimistic
forecast.
D
Unemployment
rate
increases
to
6.4
percent
by
the
end
of
fiscal
25,
that's
versus
4.2
in
the
control
forecast,
and
they
assume
that
the
Russia
Ukraine
conflict
increases
and
the
intensity
increases
and
that
drives
World
oil
back
over
a
hundred
dollars
a
barrel.
D
So
that's
the
overall
assumptions
now
what
is
not
in
here.
Let
me
just
say
this:
the
control
forecast
absolutely
assumed
no
government
shutdown.
They
stated
correctly
at
the
time
that
the
agreement
that
was
struck
was
supposed
to
allow
for
a
suspension
of
the
debt
ceiling.
There
would
not
be
a
government
shutdown
at
the
end
of
September
30th,
which
of
course
is
the
end
of
the
federal
fiscal
year,
and
we
know
that
we
cannot
say
that
that
is
the
case
right
now
so
in
baked
in
here,
especially
in
the
control
forecast,
assumes
no
federal
government
shutdown.
D
So
here's
our
classic
control
optimistic,
pessimistic
line
chart
for
real
GDP
and
you
can
see
of
that
optimistic
line,
has
a
slope
that
you
would
associate
with
what
we
would
call
Trend
growth,
but
you
can
see
in
the
control
forecast
of
blue
and
clearly
in
the
red
forecast
the
pessimistic
how
we
have
slower
growth
in
the
out
years
and
to
drive
that
home.
We
have
our
bar
chart
here
for
the
control
optimistic
pessimistic
and
again
you
can
see
that
optimistic
forecast
quite
strong
in
each
of
the
years.
D
The
green
bar
relative
to
our
base
forecast
with
the
1.9
1.2
and
1.5
percent
respectively,
and
then,
of
course,
the
pessimistic
forecast
with
that
1.3
all
the
way
down
to
0.6
or
25
and
then
back
up
to
1.4
here's
our
employment
forecast.
Now
here
you
can
strongly
see
the
difference
that
control
forecast
is
almost
identical
to
the
optimistic
forecast,
but
that
pessimistic
forecast
is
clearly
highly
Divergent
from
either
path
that
the
other
two
forecasts
and
when
you
put
that
into
terms
here,
you
can
see
that
we
start
to
go
into
that
negative
territory.
D
Now
again
s
p.
Global
is
assuming
that
this
will
be
a
necessary
result
of
the
FED
continuing
to
try
to
drive
down
inflation
to
get
back
to
their
two
percent
Target,
which
s
p
Global,
does
estimate
will
be
achieved
by
the
end
of
fiscal
25,
but
there
will
be
some
pain
along
the
way
and
their
forecast
reflects
that
pessimistic
forecast,
of
course,
has
fairly
significant
declines.
D
Now
that
is
nothing
compared
to
the
manufacturing
forecast,
where
again,
that
pessimistic
live
line.
Dives
down
strongly
putting
us
almost
back
to
where
we
were
during
the
initial
hit
of
the
Slowdown
and
work
that
occurred
because
of
covid
and
the
fiscal
into
fiscal
20..
Whereas
again
the
control
and
optimistic
are
hardly
different,
and
here
again
you
can
see
it
in
the
the
bar
chart.
D
The
control
forecast
the
slight
decline
of
0.5
percent,
then
to
2.7
and
25
and
2.1
and
26.,
more
optimistic,
of
course,
with
the
green
forecast,
but
that
pessimistic
forecast
in
red
is
show
some
pretty
strong
growth
again
with
that
large
decline,
4.4
percent
in
fiscal
25.,
here's
our
real
personal
income,
obviously
real
being
a
demon,
has
been
adjusted
for
inflation,
and
you
can
see
that
the
control
and
optimistic
again
are
fairly
tight
band,
but
with
the
pessimistic
being
more
Divergent,
but
nowhere
near
as
significant
as
it
was
in
the
employment
variables
percentage-wise.
D
You
can
see
coming
off
very
flat
growth
in
23,
again
real
personal
income,
adjusted
for
inflation.
You
can
see
1.7,
2.3
and
2.2
for
the
control
forecast,
whereas
the
optimistic
forecast
has
a
little
growth
sooner
about
the
same.
In
the
end,
I
probably
should
have
expanded
the
decimal
places.
Obviously,
for
fiscal
26,
it's
not
exactly
2.2,
in
both
cases
optimistic
slightly
higher,
but
in
that
pessimistic
forecast,
.7
1.3
and
2.7
percent
again
reflecting
a
shift
due
to
the
assumptions
in
The,
Optimist,
I'm,
sorry,
the
pessimistic
forecast
now
here's
our
wage
and
salary
disbursements.
D
Of
course,
these
are
nominal
and
you
can
see
again
a
much
tighter
band
in
the
control,
optimistic,
pessimistic
forecast
and
overall
falling
from
our
6.6
percent,
observed
growth
in
fiscal
23
in
our
control,
forecast,
4.9,
4.2
3.9,
so
just
a
slow
decline
versus
much
better,
but
still
declining
rates
of
wage
and
salary
disbursements
in
the
optimistic
and
again,
the
pessimistic
showing
a
larger
fall
and
two
fiscal
25
of
2.7
percent.
D
Here's
our
real
consumer
spending.
Now
this
is
excluding
food
and
energy,
so
it's
adjusted
for
inflation,
but
it
excludes
the
most
volatile
areas
of
inflation
and
you
can
see
the
optimistic
and
control
fairly
well
spaced,
but
again
that
decline
that
you
see
in
the
pessimistic
forecast,
percentage-wise
coming
off
of
2.8
percent,
the
control
forecast,
2
percent
1.5
1.9,
much
more
optimistic
in
the
optimistic
scenario,
2.5
2.1
and
then
again
that
pessimistic,
forecast
again
bottoming
out
in
25.
Like
a
lot
of
the
other
variables
housing
starts,
I
mean
I
know.
D
Everyone
has
been
listening
to
a
lot
of
statistics
about
what's
been
going
on
in
the
housing
market.
They've
seen
the
how
tight
the
housing
market
is.
We've
hit
a
near-term
record
in
terms
of
the
number
of
housing
starts
applied
for,
and
you
can
see
in
the
optimistic
and
control
scenario
fairly,
similar
assumptions,
but
again,
a
fairly
strong
decline
in
the
pessimistic
forecast
again,
essentially
slightly
negative
to
Flat
in
the
control
and
optimistic
scenarios
or
some
slight
growth.
D
You
know
they've
been
keeping
track
since
the
mid
50s
of
what
percentage
of
owner
occupied
existing
homes
are
vacant,
assuming
that
they
would
be
available
for
sale
and
we
have
hit
a
near-term
low
since
statistics
were
kept,
only
0.7
percent
of
all
existing
housing
is
currently
vacant
owned
by
a
homeowner,
meaning
it
could
be
brought
to
Market
to
you
know,
respond
to
these
high
prices
and
it's
the
smallest.
D
If
any
of
you
have
children
who
are
in
their,
you
know
mid-20s
to
30s
it's
common
here,
people
say
well,
I,
just
don't
know
if
I'll
ever
be
able
to
afford
a
house,
and
so
looking
at
these
forecasts,
this
near-term
drop
in
fiscal
24
would
be
seen
by
a
lot
of
people
to
be
a
two-prong,
more
Supply
being
brought
on
as
new
homes
are
constructed
and,
of
course,
that
faces
pressure
is
an
obvious
substitute
for
existing
single-family
homes,
but
again
in
the
out
years,
fiscal
24
and
25,
except
for
the
pessimistic
we're
talking
about
growing
prices
again
well
with
high
interest
rates
and
prices
growing
in
25
and
26.
D
I
could
see
why
some
people
are
concerned.
They'll
never
be
able
to
get
into
a
house.
So
hopefully
that
will
not
be
the
case
and
the
interest
rates
will
fall
as
we
continue
to
move
forward,
but
nominal
consumption
of
gasoline
and
oil.
Now
this
is
a
classic
example
where
it
reverses
the
pessimistic
shows,
a
higher
line
because,
again
in
the
pessimistic
pessimistic
assumptions,
prices
go
up.
So
this
is
our
consumption
of
gas
and
oil
and
billions
of
dollars.
D
Light
sales
of
new
vehicles-
you
know,
we've
all
heard
and
seen
the
stories
of
what
happened
after
covid
the
chip
shortage.
So
we
do
see
a
forecast
here
fairly
strong
growth.
Like
I,
said
in
the
introductory
remarks
on
the
forecast
scenarios,
the
optimistic
does
show
some
fairly
strong
growth
in
vehicles.
The
control,
of
course
right
there
in
the
middle,
but
then
pessimistic
assumes
an
immediate
decline
off
of
today's
highs
and
then
week
to
Falling
growth,
as
we
continue
out
through
the
forecast
period.
D
Again,
you
can
see
it
in
the
numbers
in
the
bar
chart.
You
know
5.1
5.1
percent
in
the
control
forecast
as
compared
to
that
relatively
strong,
optimistic
forecast,
which
I
mentioned
and
then
compared
to
the
pessimistic
0.5
2.8
and
then
a
fall
of
3.4
percent
in
the
out
year.
In
the
pessimistic
forecast,
real
exports
of
good
and
services,
one
would
think
the
the
the
weakening
of
the
dollar
they're
expecting
exports
of
goods
and
services
to
finally
reap
the
rewards
of
the
American
dollar
falling
a
little
bit
in
terms
of
relative
strength.
D
Okay-
oh
all
right,
so
here's
the
Kentucky,
non-farm
employment,
much
like
in
the
National
economy,
not
too
much
of
a
difference
in
the
optimistic
and
the
control
forecast,
but
a
fairly
strong
decline
in
that
pessimistic
forecast.
D
And
you
can
see
in
terms
of
the
actual
numbers
0.5
percent,
followed
by
a
decline
of
0.2
percent
and
negative
I'm.
Sorry
negative
0.1
percent
in
the
control,
some
growth
in
the
near
term
and
the
optimistic
but
again
negatives
in
the
out
years
and
then
again
that
pessimistic,
forecast,
quite
pessimistic
0.6
decline,
followed
by
a
1.5
percent
decline,
mitigating
to
a
0.4
percent
decline
in
fiscal
26.
D
and,
like
I,
said
before.
If
you
thought
oh
I'm,
sorry,
let
me
first
compare
the
US
to
the
to
a
Kentucky
as
a
whole.
You
can
see
in
the
forecast
period
slower
growth
in
the
Commonwealth
in
fiscal
24,
in
the
control
forecast,
0.5
versus
1.3
nationally,
essentially,
the
same
0.2
percent
decline
versus
0.1
percent
for
the
us
as
a
whole
and
then
in
the
out
year,
slightly
better
for
the
Commonwealth,
a
0.1
percent
decline
versus
a
0.2
percent
decline
for
the
nation.
D
What
I
was
alluding
to
was
much
like
in
the
National
numbers?
Our
manufacturing
employment
is
expected
to
have
much
more
of
a
decline
than
the
overall
employment
numbers.
So
here
you
can
see
the
Kentucky
manufacturing
employment
for
the
control,
optimistic,
pessimistic
and
again
that
pessimistic
number.
D
2.6
decline
in
fiscal
24,
followed
by
a
3.5
decline
in
25
and
a
1.2
percent
decline
in
the
outer
ear
fiscal
26..
So
quite
a
difference
between
the
two
and
here
we
are
compared
to
the
us
as
a
whole,
again
in
fiscal
24,
a
little
worse
in
the
Commonwealth
versus
the
us
as
a
whole.
But
then
much
like
an
employment
and
manufacturing
employment.
D
We
certainly
are
doing
a
little
bit
better
in
25
negative
1.1
percent
versus
2.7
percent
decline
for
the
us
as
a
whole
and
much
better
than
the
national
and
the
out
year
only
a
0.5
percent
decline
versus
a
2.1
percent
Decline
and
if
you
read
through
the
s
p
Global
forecast.
You
know
that
a
lot
of
the
manufacturing
is
coming
off
of
the
fact
that
we
do
have
this
big
boom
right
now
in
manufacturing
facilities
being
constructed
from
the
chips
act,
but
overall
across
manufacturing
manufacturing.
Broadly
most
firms
are
facing
tightening
lending
standards.
D
Of
course,
High
borrowing
rates
as
the
FED
has
continued
to
raise
interest
rates
and
a
lot
of
firms
are
just
not
seeing
the
need
to
continue
to
expand
as
they
feel
like
they
have
caught
up
in
many
ways
with
the
problems
they
were
facing,
with
offshoring
becoming
near
Shoring
becoming
onshoring
for
some
firms
and
they
respond
funded
with
those
movements
of
people
and
plants,
and
now
that
that's
in
place
they're
saying
that
a
lot
of
Manufacturers
don't
see
the
need
to
continue
that
process.
So
it
really
is
not
just
one
issue.
D
here's
our
personal
income
numbers
extremely
tight
band
on
these
forecasts,
almost
no
difference
that
is
appreciable
in
the
line
chart.
You
can
see
it
better
here
in
the
column
chart
so
3.6
percent
growth
and
personal
income
in
the
control
forecast,
followed
by
3.9
3.9
in
the
out
years.
The
optimistics
definitely
more
optimistic.
4.1
percent
4.3
back
to
4.1
and
the
pessimistic
is
not
as
pessimistic
as
some
of
the
other
forecast
variables
with
3.2
3.2
and
finally,
coming
back
to
3.8
percent
growth
in
the
out
year
compared
to
the
U.S,
unfortunately
I
hate
to
say
it.
D
D
Here's
our
wages
and
salaries
forecast
now
in
this
case
the
pessimistic
does
diverge.
Unlike
the
personal
income
forecast
here
in
wages
and
salaries,
we
do
have
more
of
a
Divergence,
as
you
can
see,
between
the
relatively
similar,
optimistic
and
control
as
compared
to
the
pessimistic,
and
you
can
see
that
here
on
the
bar
chart,
whereas
in
the
control
forecast
of
4,
3.7
and
35,
the
pessimistic
is
down
at
2.7
2.2,
coming
back
up
again
in
the
recovery
period
in
fiscal
26..
D
and
last
but
not
least,
transfer
payments.
Now,
of
course,
those
two
spikes
are
associated
with
the
direct
payments
from
the
federal
government
that
went
out
for
the
coveted
relief
payments.
Obviously
this
forecast
is
so
close.
You
may
have
thought
we
forgot
to
put
the
optimistic
or
pessimistic
on
the
chart.
You
can
just
see
pessimistic,
peeking
out
and
again
pessimistic
would
be
slightly
higher,
assuming
that
in
the
pessimistic
scenario
there
would
be
more
Aid
and
more
things
sent
out
to
people
in
general
from
the
federal
government,
and
you
can
see
here
in
the
chart.
D
2.8
percent
growth,
3.5
5.1
in
the
control
forecast
optimistic
little
less
in
the
near
term
versus
with
3.8
and
5.5,
and
then
the
pessimistic
forecast,
3.1
4.2,
4.8
percent.
So
again
not
a
huge
difference
across
all
three
forecasts,
but
again
coming
off
of
the
decline
that
we
observed
for
fiscal
23.
As
so
many
of
the
federal
programs
have
are
wrapping
up
or
slated
to
end
very
shortly
now.
One
thing
I
did
not
mention
in
here
which
may
have
come
to
mind
I.
They
assume
there
is
no
change
in
the
restart
for
student
loan.
D
D
C
C
The
the
the
purpose
of
the
chart
is
to
show
fiscal
23
actuals
versus
fiscal
23
official,
but
also
fiscal
23,
enacted
verse.
The
in
in
the
differences.
When
were
the
estimates
done,
the
fiscal
23
official
estimates
were
done,
December
14
2022
and
the
special
call
made
by
the
state
budget
director,
and
you
can
see
the
last
time
we
got
together.
We
are
getting
a
little
bit
better
at
this.
We
forecasted
1
billion
or
15
billion
192.9
million.
C
We
got
15
billion
147.7,
so
we
over
forecasted
by
45.2
million
dollars,
which
is
which
is
good
forecast
and
the
had
you
taken
the
control
you
would
have
done
worse
in
terms
of
your
absolute
value
of
of
the
of
the
air,
so
you
were
wise
to
take
the
the
optimistic.
The
only
thing
better
would
have
been
a
a
blend,
but
anyway,
but
we
we
did
a
lot
of
discussion
in
the
quarterly
report
about
versus
the
enacted
versus
the
enacted,
which
was
an
estimate
that
was
done.
C
Versus
that
we
were
up,
1.4
billion
and
I've
got
a
chart
about
four
graphs
in.
That
explains
why
that
is
it
wasn't
so
much
in
20
and
23
that
we
missed
the
the
growth
rate
versus
the
enacted?
The
growth
rate
was
was
reasonably
close
to
what
we
ended
up
getting.
C
We
grew
three
percent
that
wasn't
far
from
what
we
projected
the
the
problem
was
we
missed
the
base
in
22.,
the
the
base
in
22
was
under
projected,
which,
if
you,
if
you
missed
the
base
year
of
of
a
of
a
three-year
forecast,
you're
kind
of
sunk,
because
you're,
you're,
23
and
you're
24
are
going
to
be
off
and
and
let's,
unless
you
get
a
little
lucky
and
the
growth
rates
flip
on
you,
but
so
that
that's
the
reasoning
there,
the
next
chart
I'm
not
going
to
spend
much
time
on
it.
C
It
just
shows
that
in
fiscal
23
the
fourth
quarter
did
what
it
was
supposed
to
do
in
fall,
and
that
was
be,
and
that
was
because
the
the
previous
fourth
quarter
grew
16.9
percent.
It
was
a
huge
fourth
quarter
in
in
fiscal
22.,
so
we
we
had
predicted
a
decline
when
we
had
our
December
2022
estimates
and
sure
enough
it
it
came
in
and
therefore
our
forecast
was
very
close
to
to
where
it
needed
to
be
I'm
gonna
mention
three
quick
things
about
this
chart.
C
One
is
you
know
the
growth
rates
are
sort
of
all
over
the
place
in
terms
of
the
general
fund
growth
since
fiscal
10.,
the
average
growth
rate,
if
you
were
to
just
take
those,
looks
like
13
years
and
average
them
it's
4.3
percent.
C
C
If
you
look
at
the
the
big
bulge
in
21
and
22
10.9
percent
growth,
14.6
percent
grow
growth
and
21
that
10.9
percent
growth
led
to
a
1.1
billion
dollar
budget
surplus
or
Revenue
Surplus
over
the
over.
C
The
the
number
in
fiscal
22
that
14.6
growth
compares
to
the
the
hospital
one
estimates
and
we
missed
that
by
951
million,
and
even
though
three
percent
was
roughly
where
we
thought
growth
would
be
in
23
that
forecasting
year
was
the
1.4
billion
dollars
that
that
we
talked
about
and
again
I've
got
a
quarterly
chart
that
that
that
shows
this.
The
last
thing
I
wanted
to
say
about
this
slide
was
nominal
growth.
C
If
you,
if
you
look
at
just
growth
between
in
fiscal
21
and
fiscal
22,
we
grew
3.1
billion
dollars
in
two
years.
3.1
billion
dollars
in
two
years
I
saw
that
and
was
my
jaw
dropped
and
I
thought.
Well,
how
long
did
it
take
before
that
to
get
3.1
billion
dollars
in
growth?
So
you
have
to
go
back
to
fiscal
06
and
run
it
through
fiscal
20.
For
14
years
you
got
about
3.1
billion
dollars
of
growth
compared
to
just
two
years
where
we
got
3.1
billion
dollars
in
growth.
C
So
I
found
that
someone
interesting
the
next
slide.
I'm,
not
gonna
I've
got
a
better
chart
on
quarterly
growth
on
the
next
slide.
So
I'm
not
going
to
talk
much
about
it,
except
to
note
that
that
3.4
percent
decline
in
the
fourth
quarter
of
23
was
the
first
quarterly
decline
since
the
what
I
call
the
covid
quarter,
the
fourth
quarter
of
fiscal
20..
C
C
Now
this
craft
is
a
little
busy,
but
I
want
to
spend
a
little
time
on
it.
Unfortunately,
let's
talk
about
the
blue
years
for
just
a
second,
the
the
blue
years.
We
had
10.9
percent
growth.
C
In
nominal
terms,
we
had
1.3
billion
dollars
in
growth.
We
had
a
budget
surplus
of
1.1
billion
and
in
the
fourth
quarter
of
that
year
we
grew
24.8
percent.
We
had
just
done
estimates.
If
you
look
at
the
second
blue
chart
the
5.3.
We
just
done
a
fresh
batch
of
estimates
for
fiscal
21
and
fiscal
22.
C
right
there
before
the
5.3
was
complete
as
soon
as
you
as
soon
as
you
all
left
town,
it
just
started,
growing
gangbusters
uyghur.
6.7
percent.
C
Is
that
a
six
point
yeah
six
point:
seven
percent
in
the
third
quarter
and
24.8
percent
in
the
fourth
quarter,
granted
that's
off
that
low
covered
quarter,
but
24.8
percent
that
represented
nominal
growth
in
the
fourth
quarter
of
756
million
dollars
in
a
quarter,
756
million
dollars
of
growth
in
one
quarter.
C
Next
I
want
to
talk
about
the
orange
years,
no
short
bars.
In
the
orange
year,
fiscal
22
we
had
the
worst
quarter
was
9.0
percent
the
year
at
the
total,
grew
14.6
percent,
just
solid
growth
the
whole
year
again,
we
had
we've
been
meeting
a
lot
as
as
you,
as
you
know,
we
did
meet
in
the
second
quarter
of
fiscal
22
in
December
to
do
the
the
the
the
budget
estimates
for
22,
23
and
24..
It
was
a.
C
It
was
December
of
21,
so
it
was
a
regular
three
meeting
schedule
of
2021.
We
met.
We
we
saw
from
the
previous
year
how
the
the
the
last
couple
quarters
ended.
We
took
a
fairly
cautious
approach
because
we
thought
there's
no
way
we're
going
to
be
able
to
grow
over
24.8
percent
in
in
the
previous
fiscal
year.
Yet
what
did
we
do?
We
grew
16.9
percent
in
the
fourth
quarter,
after
a
strong
third
quarter
of
9.0
percent.
C
C
Those
those
are
still
covered
under
the
hospital
one
for
budgetary
purposes,
they're
covered
under
the
hospital.
One
estimates
that
we
did
in
December
of
fiscal
22
so
but
we
we
did
again.
We
came
to
town
December
14th
of
2022
right
where
that
7.6
purple
line
is
we
did
estimates.
We
got
good
growth
in
the
in
the
third
quarter.
C
The
fourth
quarter
declined
kind
of
commenced
her
with
what
we
thought
it
would.
And
lo
and
behold
we
were
right
on
target
with
our
with
our
adjusted
estimate,
but
still
versus
those
Hospital.
One
estimates
we
we
were
short
not
sure
we
had
a
1.4
billion
dollar
Surplus.
C
All
right.
That's
the
that's
a
a
little
bit
of
History.
Let's
talk
about
the
most
recent
history,
real
quick
and
that
would
be
what's
happened
in
in
fiscal
24
through
the
month
of
August
I
would
characterize
the
growth
in
August
in
July
and
August
as
a
strong,
but
a
little
bit
on
the
non-recurring
side
and
I'll.
Explain
that
the
the
sales
tax
for
the
month
of
July
in
the
month
of
August
was
5.3
percent
in
July
and
5.0
percent
in
in
August.
Those
are
you
know
we.
C
We
expect
that
to
recur
the
the
actual
nominal
collections
in
in
July
of
522.4
million.
That
was
the
second
highest
month
ever
in
the
sales
tax.
We've
only
been
over
500
million
dollars,
four
times
two
januaries,
which
are
holiday
sales
once
in
April,
and
then
this
is
the
first
time
in
a
summer
month
that
we've
we've
cleared
500
million
dollars
and
we
we
did
it
gangbusters
522.4
the
individual
income
tax
was
a
bit
of
a
surprise.
C
In
the
month
of
July,
it
grew
4.4
percent
and
withholding
was
up
3.2
percent,
which
we
found
curious,
because
you
know
the
rate
reduction
took
place,
1123,
which
was
a
10
rate
reduction.
Yet
withholding
was
up
3.2
percent
in
the
month
of
July,
so
that
was
a
bit
of
a
head
scratcher,
but
especially
since
it
fell
in
8.7
percent
in
the
month
of
August.
C
If
you
look
back
at
July,
though
it
was
a
five
Friday
month
and
and
we
thought
that
withholding
had
gone
past,
the
old
five
Friday
Friday's
boost
in
receipts,
but
the
account
the
real
economy
doesn't
change
from
3.2
percent
growth.
To
to
an
eight
eight
point,
seven
percent
decline
in
the
matter
of
a
month,
so
I
think
the
five
Fridays
hoisted
up,
the
the
July
receipts.
C
Investment
income
was
21.1
million
dollars
in
in
the
month
of
July
versus
3.3
the
year
before
so
big
big
time,
growth
and
investment
income
in
in
the
month
of
July.
The
last
thing
I
want
to
say
about
August
is
we
collected
36.4
million
dollars
in
a
receipt
thing
that
may
have
slipped
by
your
gaze?
C
If
you
look
through
the
receipts
report
quickly,
it
was
a
pass
through
entity
tax
and
you
think,
what's
the
past
Serenity
taxi,
if
that
new
tax
that
was
passed
in
in
2023
and
I'm,
going
to
talk
about
that,
but
it
brought
in
36.4
million
dollars
and
I
thought
show
that's
a
transitory
posting
that'll
go
away
later
in
the
fiscal
year
and
and
I'll
talk
about
that.
C
But
how
did
we
use?
How
did
we
use
July
and
August
numbers
for
our
forecast?
Well,
78
percent
of
the
general
fund
is
sales
and
individual
income
tax,
those
two
taxes.
We
took
a
high
frequency
data
forecast
in
the
month
of
September
and
then
treated
that
first
quarter
of
fiscal
24
as
an
actual
historical
quarter.
C
It
was
not
practical
to
do
it
for
many
of
the
other
taxes,
business
taxes,
for
instance,
you
know,
or
up
big
time
this
year,
88.7
percent
growth
in
the
the
business
taxes
through
the
first
two
months,
but
you
know
the
the
big
month
of
September,
where
we
get
estimated
payments
the
first
two
months
while
showing
you
know
huge
growth,
88.7
growth,
not
much
of
the
monies
in
so
we
wanted
to
wait
for
September
declarations
and
not
close
out
the
first
quarter
based
on
two
lower
quarters.
C
So
anyway,
that's
how
we
use
the
the
July
and
August
data.
C
The
last
thing
I
I
need
to
talk
about
before
we
get
into
the
tax
by
tax
revenue.
Estimates
is
legislative
impacts.
We
we've
had
we've
been
busy
with
legislation
for
the
last
since
2018,
really
a
lot
of
tax
legislation.
We
had
major
reform
in
2018
and
then
reform
in
2019-2021
and
then
fairly
substantial
reform
in
22
and
I.
Would
say:
semi-stantial
legislation
in
23.,
so
let's
just
talk
about
23
for
a
second
and
I'll
talk
about
the
the
other
in
just
a
little
bit.
C
You
can
see
the
the
bolded
Red
Line
and
you
can
see
some
pretty
big
negative
numbers
from
the
legislative
impact
from
2023.
Fiscal
24.
C
is
negative:
488
million
dollars
fiscal
25,
negative
823
million
dollars
and
fiscal
26
is
812.3
million
dollars,
big
negative
numbers
so
with
those
big
negative
numbers,
I,
don't
think
we're
going
to
be
going
3.1
billion
dollars
up
in
the
next
two
years,
because
we
do
have
some
headwind
from
legislation
I'm
going
to
specifically
talk
and
and
upcoming
slides
about
three
of
these
items.
The
the
first
one
I'm
going
to
talk
about
is
House
Bill
one,
which
is
the
rate
reduction
for
the
individual
income
tax.
C
Second,
one
I'm
going
to
talk
about
is
listed
on
this
chart
is
House
Bill,
5
salt
workaround.
That's
the
pass-through
entity
tax
that
I
talked
about
before,
and
the
third
one
I'm
going
to
talk
about
is
not
legislation
per
se,
but
it's
a
sales
tax
impact
that
we
need
to
discuss
and
it
was
a
a
legislative
case,
Century
aluminum,
which
you
may
have
heard
a
little
bit
about,
but
I'm
going
to
go
into
and
discuss
a
little
bit.
So
the
hospital
one
number
was
the
biggest
number
on
the
page.
C
From
the
2002
regular
session,
the
rate
fell
from
the
the
flat
rate
fell
from
five
percent
to
four
point:
five
percent:
effective
one
one
twenty
three:
we
knew
that
when
we
did
the
December
22
estimates
that
was
a
known
commodity
to
us.
So
we've
known
that
what
what
happened
in
fiscal
23
was
Hospital,
one
passed,
which
codified
the
rate
reduction
conditions
for
fiscal
22
that
lowered
the
individual
income
tax
rate
from
4.5
to
4
and
that'll
be
effective
one
one,
twenty
four!
C
So
in
two
years
we
went
from
five
we'll
have
gone
from
five
to
four,
just
in
case
you're
wondering
you
know
the
the
the
statute
contemplates
up
to
a
half
percent
reduction
each
year,
but
for
fiscal
or
for
for
the
tax
year,
beginning
1
125
that
was
based
on
rate
reduction
conditions
done
in
fiscal
23.
We've
done
those
those
rate
reduction
conditions,
we've
turned
them
in,
and
the
rate
reduction
conditions
were
not
met
in
fiscal
23,
so
there'll
be
no
rate
reduction
in
1
125.
C
C
I
went
the
wrong
way.
Sorry
now,
the
other
one
I
promised
to
talk
about
on
the
individual
income
tax.
Is
this
pass-through
entity
tax,
the
the
salt
work
around,
as
it's
called
in
the
in
the
other
30
states
that
have
passed
it?
What
the
deal
is
here.
Is
it
it's
designed
to
give
llc's
llps
s
Corps,
in
other
words,
entities
that
previously
took
income
earned
at
the
entity
level
passed
it
through
and
there.
C
Hence
the
term
pass-through
entity
passed
it
through
to
the
individual
owners
and
members,
and
they
were
taxed
at
the
individual
level
on
that
income,
but
when
they
were
done
when
that
happened
at
the
federal
level,
they
were
subject
to
the
same
five
thousand
dollar
for
a
separate
file
or
ten
thousand
dollars
for
a
joint
filer
thought
limitation
that
you
and
I
have
to
be
held
to
in
terms
of
limitations
on
our
state
and
local
taxes
that
can
be
deducted
at
the
federal
level.
C
So
what
a
lot
of
states
have
done
and
what
Kentucky
enacted
in
23
was
we
allowed
these
these
LLCs
and
llps
to
be
taxed
as
an
entity
at
the
Kentucky
level?
Instead
of
passing
the
income
down
to
the
individuals
tax
them
as
an
entity,
then
they
get
taxes
and
entity
at
the
federal
level
and
instead
of
being
held
to
that
five
in
ten
thousand
dollar
salt
limitation
entities
expense
their
taxes.
C
They
don't
itemize,
deduct
their
taxes,
so
they
could
get
full
use
of
their
state
and
local
taxes
paid
which
which
afforded
them
some
federal
tax
savings.
So
hence
salt
work
around.
We
worked
around
that
salt
limitation
for
for
those
companies,
I
mentioned
their
savings
at
the
federal
level.
The
the!
C
So
so
we
scored
this
as
a
negative
at
the
state
level,
mainly
because
the
payment
of
this
pass-through
entity
tax
creates
a
refundable
credit
that
gets
passed
through
to
the
individuals
to
be
used
in
Kentucky,
and
the
combination
of
that
refundability
of
that
credit
and
some
out-of-state
Provisions
have
led
us
to
believe
that
that's
going
to
have
about
a
13
million
dollar
negative
impact
in
fiscal
24,
growing
slightly
in
25
and
26,
but
compared
to
the
rate,
you
know
we're
talking
a
billion
dollars
versus
13
million
dollars.
C
It's
not
much
money,
but
it
is
a
new
tax
and
it's
going
to
be
a
little
confusing
in
the
beginning,
because
we
we've
already
showed
40
million
to
the
good
collected
in
in
July
and
August.
Well
that
money
is
going
to
get
shoved
out
the
back
door
later
in
the
year
when
that
refundable
credit
kicks
in
and
they
can
get
refund
refunds
or
lower
estimated
payments
or
or
whatever
so
the
net
of
that's
going
to
be
negative.
C
Okay,
so
that's
the
individual
income
tax
law
changes
sales
and
use
tax
changes,
the
the
biggest
well
start,
small,
the
we.
We
did
some
clarifying
definitions
for
services
that
were
added
in
2022,
clarifying
to
to
make
sure
that
those
services
are
taxed,
the
way
that
the
Department
of
Revenue
could
administer.
We
did
not
put
scores
on
those
Provisions,
because
it's
it's
conforming
to
what
we
wanted
to
do
with
taxation
on
those
Services.
Anyway,
there
were
some
new
exemptions
added.
C
The
most
notable
exemption
was
the
purchase
of
building
materials.
Fixtures
supplies
for
water
and
sewer
projects
when
a
private
contractor
makes
the
purchases
for
a
government.
You
know
there's
a
lot
of
natural
disasters
in
Western
and
Eastern
Kentucky.
We
needed
to
make
a
substantial
improvements
to
Water
and
Sewer
from
the
torn
torn
up
areas
of
Kentucky.
C
Some
areas
had
private
contractors
do
the
work
and
they
were
having
to
pay
the
sales
tax.
So
now
that
the
the
sales
tax
in
those
building
materials
is
exempt,
and
that
carried
with
it
a
fiscal
impact
of
about
13.6
million
dollars
in
in
24,
which
seems
like
a
lot
for
for
that.
But
you
have
to
keep
in
mind.
We
had
the
federal
money
come
in
to
assist
in
the
building
of
water
and
sewer
projects.
C
The
other
change
in
the
sales
tax
that
I
want
to
talk
about
briefly,
is
the
motor
vehicle.
The
the
the
recreational
vehicle
situation,
recreational
vehicle
non-motorized
recreational
vehicles,
were
taxed
under
the
sales
tax
before
the
2023
session.
C
The
the
industry
did
not
like
that,
because
not
all
states
taxed
RVs
non-motorized
RVs
in
a
similar
Manner
and
it
put
Kentucky
in
a
competitive
disadvantage
in
the
sale
of
non-motorized
RVs.
So
what
what
one
ended
up
happening
in
the
23
session
was
we
took
them
out
of
the
sales
and
use
tax
and
put
them
in
the
motor
vehicle
Usage
Tax.
So
it's
a
it's.
C
A
switch
from
general
fund
money
to
Road
fund
money,
not
an
equal
switch,
but
so
the
sales
tax
impact
was
about
14.8
million
dollars
at
full
implementation.
That's
a
loss
to
the
general
fund
and
a
portion
of
that
was
made
up
in
the
road
Fund
in
motor
vehicle
usage.
C
Winding
up
here,
the
the
other
big
number
on
the
page
was
this.
This
thing
that
wasn't
legislative
impact.
It
was
the
century
aluminum
case
again
not
a
legislative
action,
but
it
was
a
case
entitled
Century
aluminum
versus
the
Commonwealth,
the
Kentucky
Department
of
Revenue,
and
it
was
hurt
by
the
Kentucky
Supreme
Court.
They
handed
down
the
decision,
December
15
2022.
So
right
before
the
session
we
lost
at
the
Kentucky
lost
at
the
Kentucky
Claims
Commission
level.
We
wanted
the
Franklin
circuit
court
level
at
the
the
lower
hearing
was
reversed.
C
Kentucky
wanted
the
Franklin
circuit.
The
decision
was
upheld
at
the
court
of
appeals,
so
two
wins
for
the
for
the
Department
of
Revenue,
but
the
Kentucky
Supreme
Court
reversed
that
decision
and
it's
a
fairly
complicated
thing.
So
let
me
just
ballpark
it
it's
a
it's:
a
Kentucky
manufacturing
and
Industrial
processing
exemption
where
we
exempt
certain
items
classified
as
materials
supplies
and
industrial
tools.
C
The
fact
pattern
of
this
case
expanded
the
supplies,
the
definition
of
what
was
a
exempt
Supply,
so
that
expansion
allowed
replacement,
repair
and
spare
parts
to
be
tax
exempt,
at
least
a
portion
of
them
to
be
tax
exempt.
So
that
led
to
a
a
fairly
sizable
fiscal
impact.
You
can
see
the
red
numbers
on
the
slide:
140
million
in
24,
155
million
and
25
and
145
million
in
26.
seems
like
a
lot
I
know,
but
the
the
estimate
is
was
done
in
two
parts.
C
One
was
the
direct
loss
of
sales
tax
and
another
one
is
a
look
back.
A
four-year
look
back
because
of
you
know,
refunds
for
for
situations
where
people
paid
in
and
now
due
to
the
the
change
in
the
legal
standing.
There's
a
refund
liability
hanging
out
there.
So
that
was
that.
C
Just
a
few
more
quick
ones,
the
fiscal
impact
of
other
taxes,
the
the
car
car
rental
and
ride
sharing
tax
was
not
passed
in
23.
It
was
passed
in
22.
I
put
it
on
here,
because
we
we,
we
mishandled,
the
the
fiscal
impact
of
that
we
scored
it
as
7.9
million
dollars
in
in
23.
C
It
ended
up
being
15.8
million
and
and
just
five
months
of
collections,
so
we
we
missed
it
by
half
again
a
hundred
percent
air
on
that
7.9
to
15.8
and
the
the
estimate
for
24
39
million
dollars.
So
that's
to
the
good
on
on
the
other
taxes
and
the
the
other
one
I'm
going
to
talk
about
is
the
the
electric
vehicle
ownership
fee.
C
C
So
I've
already
showed
that
the
the
I've
already
shown
the
the
impacts
for
the
23
session.
Here
are
the
legislative
impacts
that
are
going
to
get
put
into
our
estimates
and
and
you'll
read
the
subtitle,
the
2023
session
plus
prior
sessions.
We
had
big
numbers
on
the
on
the
22
session
because
of
the
First
Rate
reduction
from
five
to
four
and
a
half,
so
these
numbers
the
the
billion
dollars.
C
The
one
point,
four,
four
six
billion
dollars
in
the
1.435
billion
dollars
are
the
money
that
gets
subtracted
out
of
our
estimates
that
we're
going
to
present
to
you
today,
we've
already
netted
them
out,
so
we
don't
have
to
report
them
and
then
report
those
at
the
end,
they've
been
netted
out
of
each
tax.
C
That
most
of
that
money
is
due
to
a
bill
that
passed
in
2019
and
had
delayed
implementation
until
1-124.
So
that's
been
hanging
out
there
for
a
long
time
and
is
finally
hitting
the
books
for
us.
C
The
the
other
well
I'll,
just
leave
it
at
that.
Those
those
are
the
impacts
that
come
out
of
the
out
of
the
general
fund
as
we
go
through
our
taxes.
Gene's
apparently
Brown
was
nice
enough
to
do
this
chart
for
me
for
the
road
fund.
These
are
the
numbers
that
get
notice.
C
These
are
all
in
black
and
the
general
fund's
all
in
red,
so
the
road
fund
gets
money
added
in
these
various
areas
in
the
amounts
listed
here,
so
I
probably
went
a
little
bit
longer
than
you
wanted,
but
I
had
to
go
through
the
tax
tax
law
changes
and
how
we
got
to
where
we're
at
we're
going
to
switch
now
to
unless
there's
questions
we're
going
to
go
through
the
general
fund
taxes
tax
by
tax,
unless
you
want
to
take
a
break
or
or
have
questions.
C
E
E
You
can
see
in
FY
23
we
declined
by
3.4
million
dollars
and,
as
Greg
mentioned,
the
First
Rate
reduction
went
into
effect
on
January
1st
of
2023
and
the
first
half
of
FY
23.
We
were
growing
very
quickly
with
the
receipts,
the
first
quarter.
E
and
then
in
in
July
and
August
of
23
I'm,
sorry,
fiscal
24..
We
had
small
increases
and
I
think
that
has
something
to
do
with
the
pass-through
entity
receipts
and
for
various
reasons,
we're
going
to
be
seeing
declines
hit.
The
net
returns
account
later
in
the
fiscal
year.
E
This
is
the
same
methodology
that
I've
used
for
withholding
for
a
very
long
time.
I
try
numerous
different
specifications,
but
I
can
never
beat
this
very
simple
model,
using
Kentucky
wages
and
salary
as
the
primary
driver.
It's
seasonally,
adjusted
I
adjust
first
differences
and
I
correct
for
auto
correlation.
E
Now,
there's
all
of
the
individual
income
tax
legislation
I've
broken
up.
If
there's
the
there's
four
pieces
in
individual
income
tax,
withholding
net
returns,
declarations
and
fiduciary,
and
all
of
the
individual
income
tax
tax
law
changes
that
you
saw
on
the
previous
slide.
Those
are
ninety
percent
of
the
individual
income
tax
is
in
withholding
and
10
is
put
into
declarations
and
I
will
have.
All
of
that.
Work
is
done
in
the
final
page.
E
As
Greg
mentioned
for
sales
tax
and
individual,
we
we
use
the
narima
model
to
forecast
the
September
value,
to
give
us
a
full
quarter
for
the
the
first
quarter
of
FY
24.
So
it's
history
in
our
model
so
where
it
says
23
2023
Q3.
That
is
an
estimated
value,
but
in
the
quarterly
model
it's
counted
as
history.
F
E
The
Declarations
model
is
a
three-quarters
moving
average
and
I
accounted
for
seasonality
by
only
only
using
moving
averages
for
the
quarters,
the
respective
quarters.
So
if
I'm
forecasting
the
first
quarter,
I
took
the
last
three
years,
the
first
quarter
of
each
of
the
previous
three
years
as
I
said
before,
10
of
the
tax
law
changes
were
in
declarations.
E
Net
returns
is
also
a
three-quarter
moving
average
model
and
the
pass-through
entity
adjustment
which
was
minus
13
million
for
FY
24,
shows
up
in
the
net
returns
account
so
the
way
the
past
the
way
the
pass-through
entity
Tax
Works.
E
These
entities
will
pay
their
pass-through
entity
tax
in
the
pass-through
entity,
tax
bucket
and
account,
and
then
later
they
will
get
to
write
off
that
that
pass-through
entity
amount
on
their
individual
income.
Tax
and
it'll
show
up
as
a
negative
and
it'll
show
up
in
our
net
returns
account
and
they
will
not
always
show
up
in
the
same
quarter.
So
that's
why
we
feel
that
the
the
deduction
the
negative
amount
will
show
up
later
in
the
fiscal
year
and
the
fiduciary
model
is
a
very
simple
three-quarter.
Moving
average.
E
Here's
a
summary
of
the
legislative
adjustments,
the
First
Column,
the
IIT,
that's
the
full
individual
income
tax
tax
law
changes
and
then
the
withholding
the
middle
column.
That's
90
of
the
total
and
the
Declarations
column
is
10
percent
and
I
chose
the
90
10,
because
withholding
makes
up
approximately
90
of
the
individual
income
tax
and
the
remainder
I
put
in
declarations,
because
I
thought
it
would
be
appropriate
for
the
the
tax
law
change
to
hit
the
Declarations
account
because
when
they
make
their
declarations,
payments
they're
going
to
be
deducting
them.
E
Oh
and
I've
listed
FY
23
on
here,
so
you
can
see.
I
I
made
I
created
policy
neutral
series
to
do
my
forecasts
so
in
the
withholding
account
when
I
adjusted
the
history
of
the
withholding
I
added
310
million
to
the
history
values
did
my
forecast
and
then
I
subtracted.
All
of
those
amounts
to
the
model
forecasts
that
got
me
my
history
back
to
the
original
history
and
that
got
me.
The
tax
law
changes
in
the
forecast.
E
And
you
can
see
global
insights
forecast
and
our
Kentucky
Mac
models
forecast
of
Kentucky
wages
and
salary.
This
is
the
same.
That
Michael
showed
you
earlier.
The
pessimistic
and
optimistic
lie
nearly
on
top
of
each
other,
and
all
three
scenarios
have
a
are
monotonically
increasing,
with
no
no
dips,
even
in
the
pessimistic
scenario.
E
Now
this
is
the
withholding
forecast
with
the
tax
law
changes
already
imposed
on
them,
so
the
model
results
for
withholding
for
fy24
had
growth
of
seven
percent
for
fy24,
3.1
percent
growth
for
fy25
and
3.3
percent
for
FY
26.
Then
I
imposed
the
tax
law
changes
on
top
of
the
the
models
rates
and
that
gets
us
to
minus
3.9,
minus
2.1
and
4.1
percent.
Now
you
might
be
scratching
your
head
about
the
4.1
percent,
that's
because
the
fy25
and
the
fy26
deducts
were
nearly
the
same.
E
E
Foreign,
this
is
the
output
of
the
Declarations
model,
with
the
tax
law
changes
already
imposed
on.
It
was
already
a
decline
of
19.9
percent
in
actual
receipts
of
23,
and
then
we
are.
The
model
now
is
showing
a
deduction
of
6.7
percent
and
24.8
percent
in
25
and
minus
4.3
and
26..
E
Now
the
the
fy24
model
results.
The
pure
model
result
was
690
million
dollars
and
that
would
have
been
the
second
highest
declarations
that
we
ever
received
than
after
I
imposed
the
tax
law
changes
that
moves
us
down
to
591
million,
which
is
still
the
fifth
highest
declarations
year.
We've
ever
had.
E
Here's
the
results
of
the
net
returns
model,
and
this
includes
the
pass-through
entity
score
the
past
due
entity.
Bill
score
the
past.
The
unity
Bill's
score
was
negative:
13
million
for
FY
24.
minus
13.5
million
for
25
and
minus
14
million
for
FY
26
and
those
are
already
imposed
in
these
in
these.
In
those
numbers.
E
And
here's
the
fiduciary
we're
in
very
strange
territory
for
fiduciary
we've
been
negative
in
the
fiduciary
account
for
a
very
long
time
now.
The
way
fiduciary
normally
works
is
10
months
of
the
year,
we're
in
negative.
E
Well,
in
FY
23
we
ran
negative
the
entire
year
and
posted
another
negative
in
April,
and
that
led
us
to
the
minus
5.7
for
for
fiduciary
for
20
all
of
23.
E
year
to
date
we're
running
minus
eight
hundred
thousand
dollars
in
the
account-
and
that's
that's
actually
I'm
sorry
that
was
last
year
and
this
year
we're
running
minus
2.5
million
dollars
in
the
account
and
so
we're
about
1.8
million
dollars
lower
than
we
were
at
this
same
time.
Last
year
and
that's
why
I've
got
I
I
haven't
predicted
a
minus
5.7
percent
for
fiduciary,
but
we're
definitely
running
in
the
negative
and
I
anticipate
it
to
be
to
finish
the
year
below
zero.
Again
this
year,.
E
Here's
all
four
of
the
accounts
summed
together
for
total
individual
income
tax
and
you
can
see
for
the
control,
minus
4.2
percent,
minus
1.3
percent
and
2.7
percent
for
the
control
scenario
and
those
large
declines
are
driven
entirely
by
the
tax
law.
Changes.
G
G
So
there's
no
specific
things
for
like
when
we
hear
announcements
like
there's
going
to
be
a
huge
new
EV
battery
facility
or
something
like
that
right,
so
I
guess
I'm,
just
thinking
back
to
what
Michael
was
talking
earlier
about,
you
know:
there's
some
federal
money
being
thrown
at
things
and
some
new
factories
being
made.
So
there's
not
any
kind
of
Point
changes
for
any
kind
of
big
announcements
or
anything
right.
E
I'm
not
aware
of
any
assumptions
based
on
building
new
factories,
but
anything
that
they
any
assumptions
that
they
made
that
affected
that
affected,
U.S
wages
and
salary
would
trickle
down
into
Kentucky
wages
and
salary,
and
that
would
trickle
into
our
withholding
model
and
that
would
automatically
be
built
into
their
into
the
model
that
they
gave
to
us.
So
that
would
be
automatically
in
the
withholding
data.
E
So
FY
23
for
coal
Was,
a
Very
Good
Year,
the
third
quarter
of
FY
23
ended
a
five
quarter
run
of
40
growth.
Every
single
quarter
for
all
five
quarters,
then
in
the
fourth
quarter
of
FY
23
growth
slowed
to
A,
5.6
percent
growth
and
I've
presented
here.
The
July
and
August
receipts
collections
for
you.
So
we
grew
one
percent
and
22.2
percent.
In
the
last
two
months.
E
The
strength
in
FY,
22
and
23
was
due
partly
to
an
increase
in
severed
tons,
but
mostly
to
an
increase
in
price
I.
The
last
time
we
met
I
presented
to
you,
the
prices
for
Central
Appalachian,
coal
and
Illinois
Basin
coal.
Oh
actually,
I've
got
a
slide
one
on
that
I'll
get
to
that.
E
So
here's
a
little
bit
of
history
for
severed,
tons,
oops
I,
didn't
click
the
click
there
you
go
there.
It
goes
so
we're
near
historical
lows:
FY
21
was
the
historical
low
for
severed
tons
in
Kentucky.
That's
for
a
full
year
for
the
entire
State
severed
tons
in
Kentucky,
20.4
million
tons
and
in
FY
22
and
23.
We
grew
by
19.2
percent
and
25.6
percent.
E
So
here's
the
most
recent
nymex
spot
market
prices
for
Central
Appalachian
coal
in
the
First
Column
and
Illinois
Basin
coal
Coal-
is
in
the
in
the
center
column.
E
So
the
last
available
spot
market
price
for
our
Central
Appalachian
coal
was
seventy
dollars
a
ton
and
for
Illinois
Basin
coal.
It
was
50
a
ton.
The
last
time
we
met
the
spot
market
price
for
Central
Appalachian.
Coal
was
a
hundred
and
eighty
seven
dollars
a
ton
and
the
spot
market
price
for
Illinois
Basin
coal
was
186
dollars
a
ton,
so
they've
come
down
considerably
and
not
only
have
they
come
down
by
about
50
percent.
But
Global
Insight
says
that
the
prices
are
going
to
continue
to
fall.
E
So
this
is
a
should
be
a
very
similar,
a
familiar
model
to
you.
The
specification
that
you've
seen
before
with
U.S
personal
income
as
the
income
variable.
The
income
component
of
this
specification,
sometimes
real
in
real
GDP,
is
the
best
fitting
model
and
sometimes
a
real
disposable
income.
Is
the
best
income
variable
for
this
specification.
But
this
time
U.S
personal
income
was
the
best
best
fitting
model
again
I
I
ream
it
out
the
third
quarter.
E
So
it's
history
in
this
model
and
seasonally
all
seasonally,
adjusted
variables
and
first
difference
and
the
first
difference
in
took
care
of
all
the
autocorrelation.
E
So
here
did
it
come
up
yep,
there's
two
things
that
should
jump
out
at
you
at
the
producer
price
index
for
coal
number
one.
All
three
scenarios
are
nearly
identical,
so
even
though
they
have
widely
different
assumptions
in
all
three
of
their
scenarios,
they
believe
strongly
that
the
price
for
coal
is
going
to
be
very
similar
in
all
three
scenarios
with
all
of
those
assumptions,
and
the
second
thing
that
you
should
notice
immediately
is
that
the
price
is
declining
throughout
the
entire
forecast
Horizon.
E
E
E
C
On
the
on
the
sales
tax
sales
and
use
tax,
that
is,
these
are
annual
growth
rates
that
we've
seen
since
fiscal
05,
the
fiscal
05
to
fiscal
23,
average
growth
rate,
just
a
simple
arithmetic,
mean
of
the
growth,
is
4.6
growth.
C
C
the
9.2
we
saw
in
fiscal
19
was
the
result
of
tax
law
changes.
We
added
I
think
it
was
27
Services
effective
at
that
time
and
that
brought
in
9.2
percent
growth
in
that
year.
We
expected
that
to
level
off,
and
then
we
think
that
the
12,
11
and
10
had
some
stimulus
components
to
them.
Obviously,
but
that's
still
the
strongest
growth
we've
had
since
we
raised
a
sales
tax
from
five
to
six
percent
in
the
early
90s,
so
really
really
strong
growth
in
the
last
three
years.
C
I'm
not
going
to
spend
too
much
time
on
the
on
the
quarterly
ones.
You
can
see
the
I,
don't
know
if
the
cursor
yeah.
If
you
look
at
these
four
quarters,
those
correspond
to
the
first
increase
in
the
sales
tax
base,
the
addition
of
services.
Of
course
this
was
the
this.
C
This
negative
quarter
was
the
fourth
quarter
of
fiscal
20,
which
was
again
what
I
call
the
coveted
quarter
and
the
31.4
is
a
bounce
off
the
the
negative
covert
quarter,
but
31.4
percent
is
more
than
just
a
bounce
off
a
low
quarter
that
that's
just
phenomenal
growth
in
in.
In
that.
C
Recent
sales
tax
estimates
are
mixed.
We
underestimated
the
sales
tax
in
fiscal,
21
I
grew
at
12
percent.
We
underestimated
that
fiscal
22
grew
at
11.
I
I
had
no
earthly
idea
that
we'd
grow
11
off
a
12
percent.
We
did
that
was
underestimated
as
well.
We
did
overestimate
the
sales
tax
when
we
had
our
December
2022
estimates.
C
We
did
use
the
optimistic
forecast,
yes,
but
we
had
a
relatively
weak
receipts
in
the
in
the
second
quarter.
In
the
fourth
quarter
of
fiscal
23,
which
you
know
we
still
grew
at
a
good
percent
in
23
was
a
growth
in
23
10.1
percent
growth.
In
23.
We
were
just
calling
for
a
little
bit
higher
growth
in
the
optimistic's
forecast
in
the
December
estimates
going
forward.
C
I'm
still
committed
to
using
composite
forecasting,
which
is
a
fancy
way
of
seeing
I'm
I'm,
mixing
forecasting
techniques
using
time
series
models,
both
arimas
and
vars,
and
structural
models
when
we
were
having
the
run-ups,
the
12,
11
and
10.1
I
did
some
analysis
for
you
all
that
showed
that
time
series
models
did
a
better
job
of
forecasting,
those
those
up
years.
The
the
the
three
big
years
time
series
models
did
a
much
better
job
of
forecasting.
Those
receipts
are
beginning
to
soften
a
little
bit
and
structural
models.
C
I
did
some
in
Sample
forecasting
this
time
in
the
structural
models.
If
you,
if
you
withhold
three
quarters
of
data,
the
structural
models
have
predicted
this
recent
softening
in
the
sales
tax.
It's
not
soft,
but
it's
softer.
The
structural
models
are
doing
a
little
bit
better
job,
picking
that
up
than
the
time
series
models
which
continue
to
to
shoot
up
a
little
bit
so.
C
These
are
calendar
quarters.
The
the
time
series
for
estimation.
I
have
data
back
to
1990
the
first
quarter,
but
it
doesn't
serve
one
to
to
use
data
back
that
old.
C
With
all
the
policy
changes
we've
had
in
the
sales
tax,
so
I
I
only
use
data
from
2010
quarter,
one
to
2023
the
third
quarter,
as
I
mentioned
earlier,
I
did
estimate
September
to
make
the
first
quarter
of
fiscal
21
historical
and,
to
be
precise,
my
estimate
was
470.9
million
dollars
for
the
month
of
September,
which
is
4.8
percent
growth
is
what
I'm
calling
for
in
the
month
of
September
September
of
last
year
of
2022
happened
to
be
a
pretty
strong
month.
C
449
million
dollars
in
collections
in
13.6
percent
growth,
so
I
am
calling
for
growth
over
a
strong
quarter,
but
4.8
percent
growth
instead
of
higher
growth
and
again
collections
of
470.9
million
and
that'll
close
out
that
first
quarter
and
I'm
treating
it
as
history.
So
fiscal
24
is
only
a
three-quarter
forecast
terms
of
model
specifications
on
on
the
arima
I
fit
a
7-1-1
which
is
the
auto
regressive
terms.
I
use
the
first
third
and
seventh
Auto
regressive
terms.
C
C
C
You
you're
not
picking
up
any
of
the
Lags
from
your
other
dependent
variable,
so
there's
no
real
gain
to
a
VAR,
so
I
use
personal
income
and
I
started
with
eight
lags
and,
and
lo
and
behold,
I
I
got
a
lot
of
the
Cross
terms
to
fit
with
sales
in
Kentucky
personal
income.
So
I
ran
that
in
differences
all
the
models
I've
used,
including
the
structural
models
you
seasonally,
adjusted
in
difference
data,
so
the
VAR
sales
and
personal
income
I've
tried
sales
and
wages
and
salaries
as
well.
C
C
The
structural
models
I
try
a
bunch
and
and
the
the
five
models
that
that
fit
the
best
were
one
of
the
structural
models
had
nominal
retail
sales,
including
Food
Services,
I
I
fit
a
model
that
had
the
the
University
of
Michigan
consumer
sentiment
index.
C
There's
a
really
cool
variable
in
s
p,
IHS
Global
called
state
and
local
personal
taxes
that
that
has
a
very
tight
correlation
with
the
really
high
r
squared
really
nice,
even
in
differences
that
has
a
high
r
squared
I
use
consumer
durables
and
then
the
the
fifth
model
is
Kentucky
wages
and
salaries.
So
I
I
do
run
five
structural
models
here
here
they
are
depicted.
So
you
can
see
the
the
sort
of
the
spread,
the
the
a
little
bit
hard
to
see
between
the
lines.
C
The
the
Top
Model
was
Michigan
consumer
sentiment
that
that
had
the
that
produced
the
highest
sales
tax
forecast
of
any
of
the
structural
models
I
used
on
on
the
second
one.
The
second
highest
is
the
state
and
local
personal
taxes
that
that
came
in
second
highest
and
at
the
bottom,
was
U.S
retail
sales.
C
That
surprised
me
a
little
bit,
but
U.S
retail
sales,
including
food,
was
the
lowest
forecast
in
the
structural
models.
C
So
here's
a
couple
graphs
just
to
show
some
that
that
Michael
hasn't
already
graphed.
This
is
the
Michigan
consumer
sentiment
index
everything's
in
the
proper
position
in
terms
of
optimistic
control
and
pessimistic
the
controls,
much
closer
to
the
optimistic
on
this
one,
the
the
variable
I
like
the
state
and
local
personal
tax
receipt.
C
This
is
a
a
graph
of
the
three
different
scenarios
than
that.
I
only
went
back
to
2018,
so
you
could
see
the
the
gap
between
the
forecasted
values
and
the
only
other
one
you
haven't
already
seen
is
retail
sales,
including
Food
Services
Michael
had
one
but
it
didn't
include
food
services
and
you
can
see
a
slow,
a
slow
growth
pattern
predicted
by
IHS
global.
C
C
I
think
the
7ar
terms
were
enough
to
have
it
forecast
the
highest.
The
VAR
with
personal
income,
I
I,
think
you
remember
back
from.
C
From
Michael's
slides
the
the
personal
income
not
well
I
shouldn't
say
that
VAR
doesn't
use
the
forecast
for
personal
income
anyway,
just
historical
patterns
of
the
of
the
personal
income
when
when,
when
the
lacks
fit
in
that
they,
they
had
a
depressing
impact
on
on
the
sales
tax.
So
these
were
the
three
models
that
I
blended
and,
as
you
can
see,
the
structure,
if
you
just
eyeball
it,
the
structural
model,
sort
of
right
in
between
the
VAR
and
the
and
the
arima.
C
So
even
though
I
do
composite
forecasting,
it's
very
similar
to
a
structural
model,
and
these
are
the
the
projections
that
I
came
up
with
now.
Keep
in
mind
that
this
is
the
model
minus
the
roughly
100
million
dollars.
That
I
talked
about
in
my
introduction,
due
to
the
sensory
aluminum
case,
you
can
see
that
the
growth
is
rather
non-impressive
but
again
fiscal
impacts.
C
We
we
will,
we
will
have
grown
about
five
percent
through
the
first
quarter,
so
in
fiscal
24,
I
I
do
expect
to
slow
down
in
growth
for
the
remaining
three
quarters
of
the
fiscal
year,
five
percent
in
the
first
quarter
and
they
have
to
average
3.8
for
the
control
4.5
for
the
optimistic
or
3.2
for
the
pessimistic
is
your
is
your
spread.
C
I
was
a
little
bit
surprised
as
well
that
that,
if
you
look
down
just
look
down
the
control,
3.6
or
3.8
3.5
3.6,
so
sales
tax
is
not
jumping
around
much
over
the
forecasting,
Horizon
and
I.
Think
that
is
indicative
of
the
stability
of
the
structural
models,
but
not
a
lot
of
wild
motions
in
the
in
the
sales
tax
forecast,
3.8
3.5
3.6
in
the
in
the
control
scenario.
C
Just
a
few
notes
concerning
the
the
control,
optimistic
and
pessimix
scenarios.
The
range
between
estimates
is
relatively
small.
C
I
I
have
a
I
have
trouble
with
that
a
little
bit,
because
if
you
look
at
the
last
three
years,
12
growth,
11
growth,
10.1
percent
growth
and
some
pretty
big
forecasting
years
and
then,
when
I
have
a
forecast.
That's
very
tight
on
one
hand,
I
feel
good
that
all
the
models
are
kicking
out
roughly
the
same
type
of
response
leading
me
to
believe
that
maybe
I'm
onto
something
in
terms
of
the
all
these
models
are
saying
the
same
thing.
C
So
maybe
the
truth
is
in
there,
but
by
the
same
token,
it
makes
me
a
little
nervous,
given
the
volatility
of
the
sales
tax
in
the
last
four
years
to
have
such
a
tight,
a
tight
Gap
between
the
estimates,
I
will
say
on
the
optimistic
and
the
pessimistic
you're,
probably
thinking.
C
The
the
Gap
in
the
optimistic
and
pessimistic
is
mainly
driven
by
the
structural
components.
What
I
did
was
I
kept
the
VAR
in
the
in
the
arima
model
for
the
optimistic,
since
the
arima
model
was
the
the
highest
model
I
used,
65,
arima
35
bar
and
for
the
pessimistic
I
used.
C
35
arima
65
bar
a
little
ad
hockery
to
use
one
of
Frank's
Old
terms,
but
it
is
what
I
did
this
comes
straight
forward
and
say
it,
but
I
am
I,
am
a
little
concerned
about
the
lack
of
variability
between
the
the
models,
but
that's
what,
by
the
same
token,
I
I
do
feel
good,
that
you
use
drastically
different
methods
and
get
pretty
close
to
the
same
results
that
that
that
was
a
good
surprise
to
me.
G
Yeah
Greg,
the
I
think
you
explained
it
I
understood
what
you
did,
but
it
seems
like
I've
heard
you
once
or
twice
say
that,
first
of
all,
it's
tight,
so
I
guess
I'm
asking
a
possible
if
we
hit
an
optimistic
or
pessimistic,
as
you
said,
is
it
going
to
be
more
variable
so
I'm,
asking
kind
of
a
turning
point
question
here,
I
think
from
what
I
heard
it
seemed
like
a
lot
of
this
was
most
of
the
models
ended
up
using
Kentucky
wage
and
salary
income
or
personal
income,
which
of
course
makes
sense
with
sales
tax.
G
So
I
guess
my
question
overall
is
less
your
model
and
more
of
like
IHS
Market
those
I'm
not
surprised
by
those
numbers,
because
IHS
Market
has
the
control,
pessimistic
and
optimistic.
The
wage
and
salary
incomes
are
very
close
to
increasing
during
all
this
time,
but
I
also
noticed
that
it
has
Kentucky
jobs
being
flat,
like
increasing
point
five
percent
and
then
decreasing
0.2
and
then
decreasing
point
one.
So
it
seems
like
that.
All
of
this
is
about
I'm.
G
G
I
mean
if
we're
at
four
or
three
and
a
half
percent
we've
got
the
same
number
of
jobs.
The
only
way
we're
getting
more
income
right
is
to
get
higher
raises.
So
I
guess
I'm.
Just
wondering
you
know
is
that
your
sense
that
this
is
coming
from
Market,
IHS,
Market
or
I,
guess
we
call
it
SB
Global.
Now
that
they're
saying
we're
going
to
get
raises
and
that's
going
to
lead
to.
Therefore
more
income
and
therefore
more
sales
tax.
C
Two
answers:
the
first
answer
is
the
the
wage
and
salary
and
personal
income
data.
I
use
was
not
a
IHS
Market.
It
was
from
the
Mac
model
that
we
run
the
Kentucky.
They
were
Kentucky
income,
Kentucky
wages
and
salaries
so
which
are
based
on
the
U.S
variables.
So
I
may
be
drawn
the
distinction
without
a
difference,
but
the
other
thing
I
would
say
in
terms
of
increases
in
wages
and
salaries.
C
Think
a
little
bit
about
the
income
tax
forecast
that
we
just
talked
about.
You
know
we
in
in
the
out
years
of
that
forecast
we
we've
we
fall
from
five
to
four
percent,
which
is
a
a
fairly
substantial
percentage
decline
in
in
the
individual
income
tax
rate.
Yet
the
individual
income
tax
doesn't
fall
near
that
much
implying
wage
growth
and
maybe
some
employment
growth.
C
If
you
didn't
have
sort
of
underlying
withholding
pushing
you
up,
and
the
only
thing
pushing
you
down
is
the
is
the
loss
of
rate,
we
would
have
seen
much
larger
declines
in
the
individual
income
tax
rate,
so
yeah
I
think
there
is
an
income
effect,
that's
that's
helping
Propel
and
the
base
expansion
as
well.
We're
making
the
base
broader
and
broader
and
broader
on
the
sales
tax,
so
I
think
we're
we're
we're
getting
almost
the
full
marginal
propensity
to
consume.
C
Those
structural
model
variables
I,
put
up,
there's
not
a
lot
of
bouncing
around
in
those
things
they're
pretty
flat.
They
they
don't
have
a
lot
of
variability
in
in
the
forecasted
periods
for
Consumer
sentiment
for
for
retail
sales
and
stuff.
So
when
you
have
a
flat
forecast
of
your
regressors
you're,
going
to
get
a
fairly
flat
forecast
for
your
structural
models,.
H
Okay,
so
we're
going
to
talk
a
little
bit
about
the
major
business
taxes
which
of
course
are
the
corporation
income
tax
and
the
limited
liability
and
the
entity
Tax
Group
together
we've
been
doing
that
for
several
years,
partly
because
there's
been
a,
we
had
difficulty
with
a
commingling
of
money
between
those
accounts
to
get
a
real,
accurate
representation
of
what
we
are
collecting
under
this
each
of
those
taxes.
So
we
talked
to
the
Department
of
Revenue
and
we
talked
internally
and
decided.
H
It
was
better
to
combine
those
in
terms
of
forecasting
and
typically,
we've
had
a
good
result
in
terms
of
our
forecast
accuracy.
But
you
wouldn't
know
that,
necessarily
by
looking
at
how
we've
done
in
the
last
two
fiscal
years,
you
notice
in
fiscal
22,
we
underestimated
the
tax
significantly,
we
missed
it
by
216
million
dollars
or
22
percent.
We
did
much
better
last
year
in
fiscal
23,
when
we
only
missed
the
forecast
by
57
million
dollars.
H
I
will
say
part
of
the
issue
was
the
22
fiscal
22
was
we
had
a
very
large
increase
in
the
receipts
as
you'll
see
here?
This
is
a
history
of
the
major
business
taxes
and
in
fiscal
22.
We
had
a
significant
increase
in
the
revenues
there,
that
was
approximately
300
million
dollars
or
a
35
percent
increase,
which
caught
all
of
us
off
guard.
We
were
nothing
in
the
underlying
forecasts
for
U.S
corporate
profits
would
have
indicated
an
increase
quite
that
large,
and
then
we
we
stayed
fairly
High.
H
Last
year,
we,
we
grew
six
percent,
but
we
stated
at
a
high
level,
so
kind
of
what's
going
on
with
the
business
taxes.
Well,
it's
really
kind
of
hard
to
pinpoint
a
single
reason.
Why
we,
why
those
revenues
surged
one-
is
a
strong
economy.
H
Another
would
be
the
repeal
of
the
Bank
franchise
tax
that
was
eliminated
and
those
financial
institutions
were
then
taxed
under
the
corporation
income
tax.
The
estimate
that
we
presented
in
past
meetings
was
going
to
be
an
increase
of
approximately
59
million
dollars,
so
that
was
one
of
the
things
that
contributed
to
it.
Another
is
the
significant
tax
law
changes
we've
had
we
had
in
2018
and
2019.
H
so
kind
of.
Broadly
speaking,
there
were
five
areas
which
were
changed
and
all
those
can
have
a
significant
impact
on
our
forecast
that
there
was
a
reduction
in
the
rate
to
five
percent.
There
was
the
apportionment
of
income
and
the
sourcing
of
sales,
tax
credits,
group,
filing
methods,
net
operating
loss
deductions
and
then
updates
to
the
Internal
Revenue
code,
and
each
of
those
can
have
significant
impacts,
and
the
other
thing
is
to
keep
in
mind
is
with
the
particularly
the
corporation
income
tax.
H
There's
a
lag,
a
significant
lag
in
getting
any
kind
of
data
on
these,
so
primarily
the
filers
are
either
on
a
calendar
year
basis
on
the
state
fiscal
year
or
on
the
federal
fiscal
year
and
like
the
individual
income
tax.
Those
taxes
are
due
on
the
15th
day
of
the
fourth
month
following
the
close
of
that
year.
So,
if
you
think
about
a
calendar
year,
filer
say
for
fiscal
23,
those
well,
let's
see
so
their
their
calendar.
H
Their
tax
year
will
run
January
through
December
they'll
pay
in
April,
there's
typically
a
six-month
extension
to
file
and
then
then
compare
that
to
someone
who's
a
fiscal
year,
filer
whose
year
year
would
end
and
September
and
then
add
on
the
four
months
for
until
they
pay
and
then
potentially
a
six-month
extension
to
file,
and
you
get
a
real
delay
in
in
getting
the
data
a
reminder.
As
Greg
pointed
out
earlier,
all
of
these
forecasts
will
have
a
reduction
of
the
48
million
dollars
in
each
of
these
three
fiscal
years.
H
So
we
look
I,
look
at
the
U.S
cop
corporate
profits
forecasts
before
tax,
and
you
can
see
where
that
has
grown
significantly
over
the
last
several
years.
With
a
dip
a
little
bit
in
23,
the
forecast
does
call
for
continued
growth
with
a
little
bit
of
a
flat
area
in
there.
I
did
zoom
in
and
yes,
you
can
see
early
on.
The
pessimistic
forecast
is
above
the
optimistic
and
the
control
forecast.
H
Unfortunately,
I
don't
have
an
explanation
for
why
that
is.
Global
Insight
does
give
some
description
of
the
forecast,
but
there's
no
discussion
of
that.
I
would
say,
however,
the
increase
is
fairly
small
and
short-lived,
so
the
impact
on
the
forecast
under
that
pessimistic
forecast
would
probably
be
fairly
fairly
minimal.
H
H
That's
what
I
have
unless
there
are
any
any
questions.
H
Let's
move
on
to
the
property
tax,
so
looking
at
how
we
did
on
the
actual
versus
the
estimate
in
fiscal
22.
Looking
at
the
bottom
line,
the
total
forecast
we
missed
by
or
I
missed
by
44.7
million
dollars,
and
when
you
look
through
the
individual
accounts,
you
will
see
that
the
motor
vehicle
Usage
Tax
or
the
motor
vehicle
property
tax
we
missed
by
49
million
dollars,
while
all
the
others
were
very
close
to
the
estimate.
The
actual
collections
So.
What
had
happened,
of
course,
with
the
motor
vehicle
property
taxes.
H
You'll
recall
that
the
vehicle
valuations
were
raising
were
Rising
quite
High.
The
governor
decided
to
freeze
the
assessments
for
the
22
and
23
assessments
at
the
21
level,
and
we
reduced
the
forecast
by
34.8
million
dollars,
which
ended
up
being
a
little
bit
smaller.
It
has
to
do
with
the
kind
of
the
way
that
those
that
freezing
of
those
assessments
worked
and
I
can
talk
about
that.
A
little
bit
more
when
we
get
to
the
motor
vehicle
section.
H
H
One
thing
to
keep
in
mind
with
these
property
tax
forecasts:
these
are
not
model
driven
forecasts.
Forecasts
I've
tried
using
models
in
the
past.
They
don't
particularly
do
well,
but
when
you
think
about
these
assessed
values,
we're
looking
at
assessed
value
of
a
stock
I
say
of
the
motor
vehicles
or
of
real
property,
and
that
doesn't
change
much
of
our
time.
When
we
look
at
the
history
of
these
receipts,
you'll
see
you'll
see
that
they're
they're
fairly
well
behaved.
H
H
Just
to
give
you
an
idea
in
2022,
the
assessed
value
of
real
property
was
about
320
billion
dollars,
the
the
residential
accounted
for
about
65
percent
of
that
commercial
was
about
27
and
then
the
Farm
property
was
about
eight
percent.
The
growth
in
this
is
is
limited
to
four
percent
annually.
H
Revenues
can
and
have
recently
increa
exceeded
the
four
percent
value,
but
then,
when
the
rate
calculation
in
the
following
years,
they
take
that
into
account
and
the
rate
is
adjusted
to
reduce
the
the
revenues
in
in
the
following
years,
and
the
revenue
typically
comes
in
in
a
period
November
through
January.
H
This
is
the
forecast
for
the
real
property
in
red.
The
history
of
the
of
that
is
in
in
blue.
H
The
forecast
is
at
three
percent
for
each
of
those
year:
3.8
percent
for
each
of
the
years,
24,
25
and
26.
Those
are
really
kind
of
historical
averages.
When
we've
had
this
assess
a
fairly
strong
assessment
growth,
which
we've
had
recently.
H
The
tangible
property-
that's
self-assessed
by
the
businesses,
primarily
the
rates
range
anywhere
from
a
tenth
of
a
cent
to
45
cents
per
hundred
dollars
of
assessed
value
and
in
all
of
these
property
taxes
we're
looking
only
at
the
state
rates.
There
are
local
rates
on
motor
vehicles
and
other
things,
and
so,
but
we're
only
looking
at
the
state
portion.
H
H
The
forecast
was
fairly
high
in
fiscal
23,
that
was
by
the
from
the
business
tangible.
It
had
been
fairly
steady.
You
can
see
a
few
Rises
and
Falls,
but
the
forecast
calls
for
4.5
percent
growth
in
24,
1.2
and
25
and
2.0
percent
in
fiscal
26..
H
H
One
thing
to
keep
in
mind
with
the
motor
vehicle
property
tax,
the
the
properties
assessed,
of
course,
on
January
1st
of
each
year,
so
any
assessment
year
covers
two
fiscal
years.
So
anybody
who
pays
in
the
first
six
months
say
on
the
23
assessment,
1123
assessment
they're,
paying
into
fiscal
23.
Anybody
who
pays
in
the
second
half
of
that
year,
they're
paying
in
the
first
half
of
fiscal
24..
H
Part
of
the
increase
is
due
to
the
strong
sales
in
motor
vehicles
that
we've
seen
in
the
last
few
years
and
we'll
see
more
of
that
in
the
in
the
road
fund.
Even
though
the
assessed
values
were
frozen
for
the
assessments
of
1,
122
and
1123,
we
did
see
growth
in
the
motor
vehicle
property
tax.
Part
of
that
again
is
strong
sales
in
motor
vehicles
and
as
new
vehicles
are
into
the
put
into
this
or
part
of
the
assessment,
that's
going
to
keep
it
fairly
High.
H
The
other
has
to
do
with
the
way
in
which
the
motor
vehicles
assessment
process
works.
It's
a
mass
appraisal,
so
they
take
there's
a
system
that
has
all
of
the
motor
vehicles
in
it.
They
re
the
Department
of
Revenue,
gets
a
printout
or
a
sheet
from
a
valuation
agency,
and
that
is
applied
to
all
the
vehicles
that
are
in
the
system,
so
it
so
for
the
fiscal
22.
When
the
assessments
were
frozen,
that
was
an
automatic
assessment
for
anybody
who
had
a
vehicle
in
the
database
in
fiscal
21..
H
So
not
everybody
automatically
got
the
reduction
in
in
their
assessment,
but
it
was
available
to
them
and
then
in
say
in
23.
If
you
bought
a
1922
car
or
2022
car,
you
wouldn't
have
been
in
there.
H
Omitted
and
delinquent
it
does
jump
around
a
fair
amount.
The
delinquent
part
is
fairly
constant.
It
runs
from
anywhere
from
six
to
seven
million
dollars
and
the
omitted.
It
can
be
six
and
a
half
and
historically
up
to
13
and
that's
kind
of
expected
to
to
jump
around
a
bit
because
the
omitted
property
is
property,
that's
not
on
the
roll
and
once
they
collect
on
that
that
property
gets
onto
the
roll.
So
the
forecast
here
is
for
17
million
dollars.
That's
just
a
five-year
average.
H
It's
been
fairly
steady
over
the
last
few
years,
so
I
just
took
an
average
for
those
three
years:
Public
Service
Company
tax.
These
are
your
utilities.
Basically
Department
of
office,
property
valuation,
the
office
of
property
valuation
in
the
Department
of
Revenue
determines
the
fair
cash
value
for
the
for
three
parts
of
that.
That's
the
real
estate,
the
tangible
and
the
franchise
they
they
look
at
that
as
a
unit
and
then
apportion
the
value
to
Kentucky,
and
then
they
the
tax
is
applied.
So
the
forecast
for
the
public
service.
H
Is
to
increase
but
fairly
small
amounts,
so
1.1
percent
in
24,
2.2
percent
and
25
and
1
and
26.
roughly
in
line
with
what
we've
had
in
the
last
few
years,
a
little
bit
of
growth.
H
H
That's
a
good
question
that
was
primarily
in
the
the
tangible
business
property
I,
don't
know
exactly
what
what
that
increase
was.
Is.
F
It
potentially
part
of,
like
you,
have
these
Capital
Improvements
through
the
tax
break,
and
then
you
have
to
put
stuff
in
those
buildings.
Sure.
H
F
Just
because
it
does
seem
like
there's
a
little
bit
of
a
structural
change
there
and
that's
affecting
the
the
outgoing
years
and
then
you
know
we're
looking
at
an
extra
over
20
million
dollars
there.
So
that's
why
it's
wondering
what's
going
on.
A
A
C
Seven
bucks
a
seven
bucks,
a
pack
then
you're
gonna
continue
to
smoke,
but
you
know,
then
fiscal,
23
or
fiscal
22
came
in
at
negative,
7.3
and
23
came
in
at
negative.
7.8
and
I've
got
my
forecast
going
down
just
a
little
bit
further.
We
did
add
vendor
compensation
enhancement
to
the
tune
of
about
a
negative
3.4
million
dollar
physical
impact,
which
began
in
fiscal
23.
We
now
compensate
at
1.5
cents
per
per
stamp
or
per
pack
just
in
general.
What's
going
on
in
the
market?
C
Is
prices
are
rising
and
discounts
are
abating
and
I,
don't
necessarily
know
if
it's
people
quitting
or
people
smoking
fewer
cigarettes
per
day,
but
it's
unmistakable
that
quantity
keeps
declining
in
Kentucky
and
it's
one
that
I
I'd
like
to
to
try
to
get
a
more
formal
model
on
the
monthly
data
stinks
on
the
cigarette
tax
because
they
don't
file
a
monthly
return.
It's
a
it's
a
stamp
order
form,
and
so
the
the
payments
for
the
stamps
can
be
very
irregular.
C
What
I'm,
trying
to
figure
out
right
now
is:
is
there
a
limit
to
the
downward
trend
and
I
I
I
I?
Don't
know
the
answer
to
it.
I
talked
to
Michael
about
the
MSA
payments
in
in
Trends,
Nationwide
Trends
and
in
cigarettes,
but
I
I
do
I,
am
calling
for
an
end
to
the
downward
Trend
in
the
forecast.
C
seven
and
a
half
percent
and
25,
and
then
a
mere
six
percent
in
in
fiscal
26,
but
we're
getting
down
to
239.4
million
we're
getting
down
to
where
I'm
starting
to
question
just
how
inelastically
these
these
things
are.
C
One
of
the
things
that
one
of
the
things
that
I
think
is
is
contributing
to
the
decline
in
cigarettes
is
OTP
and
vaping.
Otp
taxes
have
have
increased
a
fair
bit,
we're
not
losing
sales
in
OTP,
other
tobacco
products
being
snapped
chewing
tobacco
dry,
snuff
little
cigars,
Etc
in
in
vaping
of
course,
especially
closed
vaping,
is
continues
to
rise.
C
If
you
look
at
I'm
predicted
eight
percent
to
climb
this
year.
If
you
look
at
I
know
it's
only
two
months:
July
and
August,
but
if
you
look
at
July
and
August
year
to
date,
we're
down
6.1
percent,
but
August
was
was
a
huge
month.
C
29.1
million
dollars
a
lot
of
stamp
orders
in
the
month
of
August,
so
I
think
that
that
was
maybe
our
our
big
month
for
the
year
and
and
we're
going
to
continue
to
to
erode
and
then
I
have
it
the
rate
of
declines
getting
a
little
bit
less
over
the
biennium.
But
I
I
don't
have
a
great
feel
for
this
I
I
I'm
I'm
I've
been
chasing
it
down
the
whole
way
and
I
and
I
don't
seem
to
be
getting
low
enough.
But
I
do
think.
C
Vaping
gets
taxed
as
a
separate.
Well,
it
gets
taxes,
sales
tax
too,
but
there's
a
vaping
tax
and
there's
a
vaping
tax
on
so-called
open
systems
and
so-called
closed
systems.
The
closed
systems
are
these
little
I,
don't
know
that
they
they
come
in
a
cartridge
and
that
they
can
be
consumed
with
I'm,
not
a
vaping
guy,
so
I
don't
know,
but
the
open
vaping
is
where
you
buy.
The
the.
C
All
the
money
is
enclosed,
there's
very
little
that
comes
in
an
open
okay.
So
anyway,
that's
that's
I
I!
Obviously,
don't
do
a
control
optimistic
pessimistic
for
cigarettes.
I
don't
have
a
good
enough
handle
on
it,
but
that's
my
forecast
for
cigarettes
we'll
be
within
a
couple
million
of
the
forecast,
but
hitting
the
growth
rates.
I've
I've
found
elusive,
so
the
Kentucky
Lottery,
on
the
other
hand,
has
has
has
been
a
little
bit
easier
to
to
predict,
mainly
because
of
the
language
in
the
budget.
I
C
The
the
trends
right
now
in
the
lottery
are
good
I,
remember
just
a
few
years
ago
that
they
toppled
one
billion
dollars
in
sales
in
the
Kentucky
Lottery
they're,
now
up
to
1.84
billion
dollars
in
in
total
sales.
Last
year,
nominal
growth
in
sales
was
164
million
dollars
or
9.8
percent
growth
in
sales.
C
The
Kentucky
Lottery
continues
to
innovate
in
in
their
terms
to
to
bring
a
competitive
product
to
the
market,
to
keep
people
excited
about
their
games
and
so
forth
in
terms
of
their
product
mix.
Product
mix
is
not
favorable
to
heaven.
The
dividend
grow
as
much
as
sales
growth,
for
instance,
scratch
off
tickets
were
that
they
continue
to
be
over
half
the
sales
943
0.5
million
dollars
in
fiscal
23
that,
but
that
was
down
from
fiscal
22
down.
C
2.1
percent
scratch-offs
have
a
a
fairly
especially
the
the
lower
price
point.
Scratch-Offs
have
a
high
dividend
component
and
a
low
a
lower
return
to
players.
The
the
higher
the
value
of
the
scratch-off
ticket,
the
the
higher
the
return
to
players
in
terms
of
expected
value
for
a
dollar
wagered
draw
games,
scratch-offs
had
been
rising,
they
fell
2.1
percent
last
year.
C
On
the
other
hand,
draw
games
had
been
falling,
draw
games
being
pick
three
pick:
four
Powerball
Mega
Millions
those
had
been
sliding
and
they
were
up
3.4
percent
in
fiscal
22,
and
that
was
mainly
due
to
several
big
multi-seek
jackpots
that
accumulated
in
in
23
the
you
know:
Powerball
hit
a
billion
dollars
a
couple
times
a
couple
three
four
five
times:
even
Mega
Millions
topped
the
billion
dollars.
So
we've
had
these
big
run-ups
and
jackpots
and
those
those
those
periods
bring
in
a
lot
of
sales
to
the
state.
C
But
the
biggest
growth
in
terms
of
sales
for
for
the
Kentucky
Lottery
are
the
ilottery
instant
play
sales,
they've
grown
the
394
million
dollars
and
that's
up
167.9
million
or
74.3
percent
over
fiscal
22..
If
you
look
at
their
nominal
growth
up
in
the
top
there,
they
grew
164.5,
instant,
water
or
eye
Lottery.
Instant
play
grew
167.
So
all
the
growth
is
in
ilottery
the
the
problem
with
that.
C
Well,
it's
no
real
problem,
but
in
terms
of
the
reason
that
dividends
don't
go
up
as
much
as
sales
are
going
up
is
because
the
higher
the
the
higher
price
expense
for
the
ilottery
instant
play.
They
have
the
highest
percentage
payout
to
players
relative
to
any
other
lottery
product.
C
Grew
9.8
percent,
so
the
dividend
should
grow.
9.8
percent,
not
so
fast,
because
when,
when
the
when
the
composition
of
the
games
changes
so
does
the
price
payout
change,
and
so
you
get
less
of
a
a
price
payout
per
dollar
wagered.
But
you
still
get
a
higher
price
payout
or
a
higher
dividend.
C
This
next
slide
explains
the
the
the
the
the
24
estimate,
at
least
the
budget
bill
that
we
talked
about
earlier
Hospital,
one
from
the
2022
regular
session
had
language
in
it.
That
said,
if,
if
the
lottery
dividend
exceeds
these
threshold
levels
and
for
fiscal
24,
the
threshold
level
is
340
million
574.7.
C
If
it
exceeds
that,
then
the
first
three
million
in
excess
funds
gets
transferred
to
the
general
fund
portion
of
the
of
the
lottery
dividend
and
the
rest
gets
transferred
to
a
trust
and
agency
account
and
and
can't
be
appropriated
without
the
express
authority
of
the
general
assembly.
So
the
24
estimate
is
is
given.
The
growth
in
dividends
we've
seen
is,
is
a
no-brainer.
It's
going
to
be
the
three
340
5747,
plus
the
3
million,
so
I
know
pretty
much
with
certainty.
C
What
the
what
the
general
fund
portion
of
the
of
the
24
Lottery
is
going
to
be.
The
the
only
question
the
only
question:
what's
going
to
be
what
what
is
26
and
or
25
and
26.
so
to
come
up
with
those
I
talk
with
officials
from
the
Kentucky
Lottery,
we
talk
about
their
sales
projections.
C
We
talk
about
their
game
mix,
we
talk
about
all
sorts
of
different
Financial
variables
that
they
use
and
we
we
sort
of
jointly
come
up
with
a
with
a
dividend
schedule
and
and
what
we
came
up
with
was
the
general
fund
portion
is
going
to
go
from
343.6
and
24
to
360.
C
C
So
that's
our
forecast
for
the
lottery
I
got.
You
know
it's
easier
to
read
on
this
slide
than
it
was
the
previous
slide.
But
it's
the
same
information
you
can
see
in
the
bottom
column
chart
that
the
general
fund,
Lottery
dividend
has
grown
every
year.
Since
you
know
23
24,
25,
26,
steady
growth
on
the
general
fund,
Lottery
dividend.
C
Know
I
talked
to
them
about
that.
You
know.
They've
had
a
lot
of
competition
in
recent
years.
You
know,
starting
with
historical
horse
racing.
The
historical
horse
racing
was
was
thought
that
to
be
very
detrimental
to
the
to
the
Kentucky
lottery
in
terms
of
just
another
outlet
for
for
the
for
our
gamer
to
to
to
part
with
their
money,
but
it
it.
C
The
historical
horse
racing
has
not
had
a
negative
impact
on
the
Kentucky
Lottery
and
I
talked
to
Maggie
and
Howard
with
the
Kentucky
Lottery
Corporation,
and
they
right
now
are
saying
that
they
don't
anticipate
a
a
substantial
threat
from
Sports
wagering.
So
apparently
it's
a
different
demographic
that
that
plays
Sports
wagering
versus
the
lottery.
C
But
it's
a
good
question.
You
would
think
with
just
still
another
competition
for
your
gaming
dollar
out
there,
that
it
would
that
it
would
potentially
lower
the
dividend,
but
they
haven't
indicated
that
it's
a
good
question.
C
So
that's
the
lottery
forecast
Lottery
is
a
dedicated
with
the
money
that
goes
to
the
general
fund.
That's
dedicated
to
education,
the
keys
and
cap
ktg
scholarships.
C
C
The
other
category
contains
60
accounts
that
are
not
otherwise
classified
into
a
major
account:
The
Perennial,
big
five
or
the
insurance
premiums,
taxes,
the
alcohol
taxes,
Telecom
taxes,
inheritance
taxes
and
abandoned
property
tax
abandoned
property
receipts
are
what
I
call
the
five
largest
ongoing
accounts.
Paramutual
is
is
getting
ready
to
surpass
abandoned
property
sneak
into
fifth.
But
really,
if
you
look
at
fiscal,
23
investment
income
shoots
way
up
the
list,
because
we
given
those
surpluses
that
that
we
talked
about
earlier
in
the
introductory
slides.
C
The
Surplus
is
a
good
bit
of
the
surpluses
were
deposited
into
the
rainy
day
fund.
The
rainy
day
fund
is
invested
in
a
short-term
pool
and
it
brings
in
investment
income
for
the
state
and
long
story
short.
We
made
150.5
million
dollars
in
income
on
investments
in
fiscal,
23.,
I
will
say
about
the
other
Revenue
sources.
Many
of
them
were
estimated
with
annual
data
instead
of
quarterly
data.
Dr
Thomas
Jones
does
do
the
the
natural
gas
oil
production
and
mineral
Severance
taxes
when
he
does
the
cold
forecast.
C
He
goes
ahead
and
does
those
those
forecasts
for
the
other
for
the
other
category
in
in
Aid
of
my
forecasting
efforts,
but
even
with
that
I'm
not
including
optimistic
and
pessimistic
estimates
for
the
other
tax,
it's
just
a
control
forecast
for
the
other
taxes.
C
Now
I
was
a
little
disappointed
in
the
other
tax
forecast
in
fiscal
23.
It's
only
about
a
billion
dollars
and
we
missed
it
by
88.1
million
dollars,
which
I
found
disappointing
the
of
the
88.1
million
two
accounts.
Two
of
the
60
accounts
made
up
the
entire
Gap.
C
C
The
forecasted
amount
that
we
did
in
December
of
2022
was
67.5
million,
so
we
were
83
million
dollars
over
forecast
in
income
on
investments.
So
we
took
a
much
deeper
dive
for
the
estimates
we're
presenting
today
on
investment
income
to
try
to
narrow
that
down
quite
a
bit
the
rest
of
the
88.
C
You
can
attribute
a
lot
of
places
I'm
attributing
to
the
ride
sharing
tax,
which
came
in
7.9
million,
overestimate
as
I
described
earlier,
so
those
two
taxes
are
90.9
million
over
the
forecast
and
the
total
amount
was
88.1.
So
just
two
Revenue
sources
are
enough
to
to
get
a
fairly
sizable
error.
In
the
other
forecast.
C
C
We
estimated
188.7,
which
was
Stout
growth,
but
we
ended
up
with
196,
which
was
7.3
million
over
the
forecast
and
another
Revenue
Source
was
legal
settlements.
We
forecasted
5.5,
we
got
16,
so
we
were
nine
and
a
half
million
over
the
forecast
on
these
legal
settlements
that
that
turn
off
some
money
from
periodically
through
the
fiscal
year
since
income
on
investments
is
is,
is
by
far
the
the
largest
source
of
variation
right
now
in
the
other
forecast
I
want
to
talk
about
it
a
little
bit.
C
It's
not
a
perennial
source
of
significant
income
up
to
now,
but
it
did
have
150
million
dollars
of
receipts
in
23.
The
dramatic
increase
obviously
comes
from
the
surpluses
that
were
deposited
in
the
state's
granny
day
fund.
C
The
the
state's
rainy
day
fund
is
invested
in
a
short-term
pool
and
short
rates.
If
you
follow
markets
and
I'm
sure
you
all
do
have
increased
substantially
in
the
last
eight
months
a
year
year
and
a
half
short
rates
have
really
been
shooting
up.
Every
time.
A.
C
C
Really
I
I
sat
down
for
quite
a
bit
with
the
Office
of
Financial
Management,
who
was
a
great
help
on
the
income
on
investments,
forecast,
Ryan
barrows,
the
executive
director
of
The
Office
of
Financial
Management,
very
helpful.
C
We
had
to
make
some
assumptions
on
investable
balances.
We
have
higher
balances
in
fiscal
24
compared
to
fiscal
23
because
of
the
Surplus
in
23.
However,
we
got
input
from
the
state
controller's
office
and
the
state
budget
office
on
what
balances
would
do
from
24
to
25
and
26.
We
do
have
balances
going
down
from
24
to
25
a
little
bit
and
we're
holding
balances
constant
from
25
to
26
..
C
You
would
think
that
you
think
of
a
rainy
day
fund
and
you
think
of
it
locked
away
somewhere
ready
to
you
know
ready
to
spring
upon,
but
money
comes
in
and
out
of
it
throughout
the
year
to
meet
liquidity
needs
so
that
balance
will
float
around
hence.
C
Hence
we
do
a
monthly
balance
forecast
for
the
for
the
the
portion
of
the
short-term
pool
that
kicks
off
general
fund
dividends
and
the
other
part
of
it
which
Ryan
was
instrumental
in
helping
with
are,
is
the
interest
rate
components
the
we're
expecting
higher
interest
rates
than
24
than
we
had
in
23,
which
is
going
to
help
the
forecast.
C
Obviously,
and
but
rates
are
going
to
decline
in
25
and
26,
at
least
according
to
s
p,
IHS,
Global
and
I
do
have
a
forecast
that
that
we
worked
on
with
the
the
officer
of
financial
management,
247.8
million
dollars
in
24,
which
is
you
know,
almost
100
million
over
the
150
million
that
we
got
this
year.
25
is
going
to
go
back
down
to
close
to
150
million
dollars
and
26
it's
going
to
go
down
to
123.9
million.
C
I'm,
not
saying
that
that
the
short-term
pool
invest
in
three-month
treasury
bills,
but
three-month
treasury
bill
is
indicative
of
a
of
of
the
pattern
that
short
rates
are
expected
to
to
follow
and
in
23.
If
you
took
an
average
of
the
monthly
t-bill
rates,
it
would
be
4.1
percent.
24
is
expected
to
be
5.4
percent,
which
explains
that
jump
from
150
to
what
was
it
two
247.
C
And
and
then
by
the
end
from
from
24
to
26,
the
rate
gets
cut
in
half.
So
you
know,
aside
from
what's
happening
in
balances,
which
is
a
slight
shrinking.
The
interest
rate
component
is
what's
going
to
which
is
what's
going
to
pull
the
income
on
investments
down.
We
think
so
a
chance
will
do
better
if
interest
rates
don't
fall.
The
way
that
we
do,
but
our
best
professional
judgment
is
for
the
forecast
right
here.
247
148.8
123.9,
is
what
we
think
we're
going
to
get
on
income
on
investments.
C
So
you
know
that
big.
If
you
put
all
the
other
forecasts
together,
I
went
long
on
investment
income,
but
the
the
remaining
accounts
are
basically
growing,
predictably,
some
less
than
others
some
more
than
others,
but
the
other
forecast.
We
were
just
under
a
billion
dollars
in
fiscal
23.
The
big
increase
in
investment
income
has
other
receipts
bulging
up
to
1.1
or
1
billion
131.5
million
25
1
billion
I
can't
read
that
oh
55.7
million
and
then
roughly
flat
in
in
2026.
C
So
hopefully,
with
our
beefed
up
forecast
for
investment
income,
we're
going
to
be
a
little
bit
closer
on
the
other
forecasts
than
we
were
this
fiscal
year.
C
That's
what
we're
calling
for
and
again
we
did
not
do
control
optimistic,
pessimistic.
C
C
Before
we
pull
up
the
spreadsheet,
which
is
what
we
typically
do
after
we
get
through
the
the
general
fund
slide
presentations
I
want
to
just
put
up
a
couple
slides
on
just
general
fund,
summary
type,
slides
that
kind
of
set
the
stage
for
what
we're
going
to
look
at
on
the
spreadsheets.
C
C
So
not
a
huge
gap
between
the
the
scenarios
you
get
a
little
bit
bigger
Gap
and
in
25,
where
you
where,
if
you
took
the
pessimistic
you'd,
be
called
for
a
0.3
percent
decline.
Take
that
up
1.6
percent.
You
get
the
optimistic
at
1.3,
not
much
difference
in
the
growth
rates
in
26.
But
if
you
go
to
the
next
slide,
these
are
the
gaps
between
high
and
low
for
fiscal,
24,
25
and
26..
C
C
384
and
25,
and
a
fairly
substantial
486.1
million
dollar
gap
between
high
and
low
and
26.,
and
not
as
big
as
some
of
the
forecasts
we've
presented
to
you
in
the
past.
But
486
million
is
still
a
sizable
appropriation
that
a
lot
of
agencies
would
like
to
have
so
it.
C
You
know.
Last
year
we
grew
three
percent.
All
the
growth
rates
in
24
are
substantially
lower
than
the
three
percent.
We
grew
in
fiscal
23.,
but
a
big
chunk
of
that
is
the
slide
that
I
used
in
the
introduction,
which
has
the
fiscal
impacts
of
the
last
two
legislative
sessions:
fiscal,
the
the
2022
session,
the
2023
session.
We
did
tax
reform
and
they
weren't
Revenue
neutral.
They
weren't
meant
to
be
Revenue
neutral
and
you
know
I
believe
the
number
was
wasn't
a
billion
dollars,
Thomas.
C
You
take
a
billion
dollars
out
of
the
base
and
that's
gonna.
You
know
if
you,
in
other
words,
if
you
put
that
back
in
the
growth,
would
have
been
more
than
three
percent,
which
is
what
we
saw
last
year.
So
a
lot
of
the
depressed
growth
that
you
see
in
the
general
fund
is
a
function
of
the
legislative
impacts.
C
So
that's
all
the
material
we've
prepared
on
the
general
fund.
C
And
with
that,
I
am
gonna
get
out
of
the
revenue
slides
and
pull
up
yeah.
If
you
don't
mind.
C
D
C
1.6
growth
in
24,
0.8
percent
growth
in
25.
and
a
three
percent
growth
in
26..
The
other
thing
I
I,
would
be
remiss
not
to
remind
you
of
these.
Are
the
preliminary
estimates
we'll
get
another
bite
at
the
Apple
in
December
and
we
can
incorporate
any
new
information
or
any
new
scenarios
that
the
the
group
would
like
us
to
incorporate
to
either
get
different
scenarios
you'd
like
to
see?
But
these
are
the
preliminary
estimates
we
can.
We
put
before
you
for
consideration.
A
C
Well
sure,
the
I'm,
not
the
budget
expert,
that
Perry
nut,
is
but
the
way
I
understand
it.
The
Fisk
we
already
have
a
fiscal
24
budget
out
there
by
virtue
of
Hospital
one
that
we
passed
so
absent
changes
to
the
contrary
of
the
the
how
the
the
fiscal
24
budget
has
some
some
some
placeholders
already.
C
The
the
numbers
for
25
and
26
will
go
into
sort
of
a
soft
budget
awaiting
the
the
final
estimates
in
December,
but
I'm
sure
that
the
the
the
executive
branch
and
the
in
the
legislative
branch
will
be
preparing
budgets
using
these
preliminary
estimates,
with
with
flexibility
to
to
plus
or
minus
the
estimates.
As
as
we
get
closer
to
the
final
yeah.
C
The
way
this
usually
works
is
well
chairman,
you
can
determine
how
it
works,
but
in
in
the
past
there
there's
these
Yellow
Boxes
up.
Here
we
can
toggle
the
different
weights.
The
pessimistic
is
a
residual
so
that
we
force
it
to
add
up
to
100
percent
and
it
and
and
it'll
show
you
the
different
levels
of
estimated
general
fund.
If
you
scroll
down
the
page,
you
can
see
the
official
estimates
for
24
and
the
differences
between
the
official
estimate
for
24..
C
F
F
I'm
right
now
leading
towards
the
100
control
and
I'll,
give
you
my
reasoning.
70
of
the
revenues
are
coming
from
sales
and
income
tax,
the
remaining
22
percent,
at
least
I
mean
please
correct
me.
If
I'm
wrong
sounds
like
our
net
is
going
to
have
negative
growth.
F
That
would
require
that
the
sales
tax,
which
is
going
to
be
the
bulk
of
this
to
be
over
3.8
percent
in
growth,
which
is
below
what
the
control
estimates
are
saying
in
order
to
meet
the
2.9
percent
growth
rates
that
we've
had
up
until
now,
so
it
doesn't
sound
like
the
optimistic
is
on
the
table
and
the
pessimistic
to
me
seemed
way
too
pessimistic,
and
maybe
that's
just
my
reaction
to
it.
F
So
I
I
feel
safer
with
the
control
and
that
that's
where
I'm
at
right.
Now,
at
least
given,
given
what
I've
seen
in
those
estimates,
we
also
know
that
there
won't
be
a
trigger
for
an
additional
decrease
on
the
income
taxes,
because
that
that
would
have
come
into
play.
If
we
had
to
worry
about
that
as
well
and
I'm,
maybe
a
little
bit
more
pessimistic
than
others,
I
think
the
FED
will
go
to
six
percent
within
the
next
six
months,
which
would
ultimately
affect
these
even
further
downward.
G
I'm
generally,
one
of
the
more
pessimistic
ones
I
think
in
this
group,
but
I
think
I
I
would
be
fine
with
control
or
maybe
some
pessimistic,
but
yeah
I.
For
me,
the
optimistic
I
think
is
off
the
table.
I'm
a
little
bit.
Maybe
like
you
I'm
a
little
bit
confused
about
it's
and
some
of
the
graphs.
Look
like
the
pessimistic.
G
Was
employment
really
dropping
a
lot
and
I'm
just
I'm,
not
sure
that
I
think
I'm
going
to
see
employment
drop
that
much
in
next
year,
too
and
and
see
is
how
it
with
the
numbers
you've.
Given
us.
It's
such
a
tight,
bound,
I'm,
probably
fine
with
the
control,
especially
because
it
looks
like
that
for
fiscal
year
24.
Even
the
control
takes
this
up
by
a
quarter
of
a
billion
dollars
or
so
and
so
I'd
say
between
now
and
December,
I
think
I'm,
fine
waiting
for
control
until
we
can
redo
the
numbers.
I
I
C
The
question
makes
sense:
the
answer:
is
we
don't
have
that
available,
I'm
trying
to
think
how
we
would
construct
it,
because
it
would
be
it's
not
something
I
could
punch
out
on
the
fly,
but
it
it
could
potentially
be
something
I
could
provide
at
the
at
the
next
meeting.
C
C
I
C
It
depends
on
the
variable
you
know
some.
Some
of
our
tax
variables
use,
Kentucky
sales
tax
uses
all
Kentucky
wages
and
salaries
and
personal
income.
It
uses
Kentucky
variables,
the
structural
models
use
U.S
variables,
but
not
personal
income
or
or
wages
and
salaries
or
anything,
but
it
sort
of
varies
by
tax.
I
D
A
Or
along
those
same
lines,
it
might
be,
if
I'm
understanding
what
we're
talking
about
here.
If
we
compare,
could
we
compare
how
the
Kentucky
forecast
actually
tracks
actual
Kentucky
performance
and
how
the
national
forecast
actually
tracks
National
performance
and
is
what
are
the
forecast
errors
in
those
two
estimates
and
is:
would
that
be
potentially
useful
information
for
us
going
forward.
D
And
we
have
discussed
that
in
the
past
all
I
was
making.
A
point
was
remember
that
the
information
that
we
receive
from
s
p
Global.
That
information
is
to
give
everyone
an
idea
of
what
is
going
on
in
the
overall
economy.
What
the
what
the
expectations
are
across
General
broad
categories,
the
parts
that
I
present
numerous
analysts.
Not
only
do
we
take
that
information
from
s
p
Global
and
put
it
through
the
Kentucky
Mac
model
to
make
a
translation
of
how
we
relate
so
typically,
for
example,
a
manufacturing
employment.
D
D
Then
of
course
each
individual
analyst,
for
example,
Greg
might
find
a
variable
for
Home
Furnishings
that
he
says
homes
Furnishings
at
a
national
Trend
level,
often
reflect
underlying
Trends
and
housing
and
other
things
and
I
find
that
that's
a
pretty
good
predictor
for
Kentucky
at
some
sort
of
relationship.
Some
statistical
relationship
for
our
sales
tax
or
a
component
of
sales
tax.
D
So
it's
a
multi-step
process
and
we
did
talk
about
this
at
a
previous
CFG
meeting
because
we
all
came
in
after
covet
and
said
man
could
we
all
be
any
more
wrong
and
it's
because
again,
there
can
always
be
large
shifts
in
policy.
You
know
we.
We
use
the
example
of
unemployment
insurance
had
a
a
medical
I'm,
not
a
medical,
but
a
disease,
an
emergency,
a
pandemic.
D
We
wanted
people
to
stay
home
and
we
had,
if
I
remember
correctly,
nearly
20
billion
dollars
in
unemployment
insurance
paid
out
and
of
course
you
might
imagine,
that's
going
to
change
people's
behavior
and
so
there's
always
going
to
be
shocks
to
the
system.
But
we
have
looked
over
the
long-term
trends
at
how
well
s
p
Global
under
many
different
names.
I
know
we
all
remember
we
made
jokes
about.
D
They
were
just
waiting
for
housing
to
rescue
us
out
of
the
08,
the
what
seemed
so
large
at
the
time
the
08
pullback
and
the
economy
they
kept
putting
forth
housing,
housing,
housing
and-
and
we
thought
well,
it's
a
good
thing-
that
we
don't
use
a
lot
of
the
housing
variables
because
they
sure
seem
to
be
putting
a
lot
of
emphasis
on
that.
C
I
I
think
I
can
I.
We
can
do
some
some
analysis
that
shows,
for
a
past
run
of
the
Mac
model
or
a
past
run
of
IHS
Market
data,
how
accurate
that
forecast
ended
up
being,
but
I
I
I
would
still
posit
that
you
know
we
missed
the
forecast
by
1.4
billion
dollars
in
in
23,
and
it
wasn't
because
we
didn't
forecast
the
economy
right.
C
It
was
we
didn't
forecast
the
base
year
right
and
and
the
the
the
the
the
econometric
forecast
had
a
smaller
role
in
it
than
just
the
stimulus
money
and
and
and
some
other
factors
that
led
the
the
base
year
to
be
high,
but
I
I
do
think
we
can.
We
can
do
some
passport
checking
up
at
a
point
in
time.
What
did
the
Mac
model
say
and
what
ended
up
happening?
We
can
do
that
and,
and
we'll
try
to
put
some
of
that
together
for
the
next
next
meeting.
C
So,
just
to
memorialize,
the
control
forecast
is
for
15
billion
394.2
million
in
in
fiscal
24,
which
is
1.6
percent
growth
for
25,
it's
15
billion,
514.9
million
or
0.8
percent
growth,
and
for
26
it's
15
billion,
987.7
million
or
three
percent
growth.
Is
that
what
we
agreed
to?
Okay.
C
With
that
to
keep
things
moving,
we're
going
to
go
through
the
road
funds
slides
so
Gene.
H
So,
looking
at
fiscal,
22,
actual
versus
estimate
estimated
going
straight
to
the
bottom
line,
the
estimate
was
within
4.7
million
dollars.
Actual
receipts
were
within
4.7
million
dollars
of
the
Estimate
0.3
percent,
so
very
close.
That
year,
looking
last
year,
fiscal
23,
we
were
within
32
million
dollars.
H
H
With
the
motor
fuels
tax
was
we
made
our
estimate
on
what
we
thought
the
fuels
were
going
to
be,
and
then
right
after
that,
the
governor,
through
emergency
regulation,
froze
the
increase
in
the
tax
rate,
so
that
had
that
had
an
impact
on
on
our
error
there
in
terms
of
the
motor
vehicle
usage,
we'll
look
at
historically
how
that's
done.
We've
had
some
very
large
increases
in
that
over
the
last
few
years
and
much
larger
than
we
anticipated.
H
And
when
you
look
at
these
percentage
changes,
it
has
a
lot
to
do
with
the
two
biggest
components:
the
motor
fuels
and
the
motor
vehicle
usage
together.
They
combined
for
about
83
percent
of
the
total
early
on
back
in
2010
fuels
was
about
52
percent.
H
And
usage
was
about
28
of
the
total.
That's
gotten
closer.
Last
year
it
was.
The
fuels
accounted
for
45
percent
of
the
total,
while
usage
accounted
for
38
percent,
but
the
early
years
when
you
can
see
the
large
growth.
That
was
at
a
time
when
the
motor
fuels
tax
rate
was
increasing
every
year.
So
we
were
getting
large
increases
in
the
fuels
in
the
middle
portion,
where
we
had
low,
relatively
low
growth
rates.
H
So
in
terms
of
the
motor
fuels,
as
I
talked
about
early
on,
you
can
see
the
large
increases
with
the
increasing
tax
rate
flat
to
well
unchanging
tax
rate,
so
any
changes
in
the
fuels
Revenue
was
due
to
consumption
and
then
small
increases
in
the
last
few
years.
H
A
few
details
on
the
motor
fuels
taxes-
there
are
three
components
of
the
tax:
two
are
fixed,
one
is
variable.
The
variable
portion
clearly
is
the
most
important
it's
the
nine
percent
of
the
average
wholesale
price.
So
we
have
to
calculate
that
every
year
for
fiscal
24,
that
rate
is
23.7
cents
per
gallon.
You
compare
that
to
the
fixed
portion,
which
is
either
6.4
cents
for
gasoline
or
3.4
cents,
4.4
cents
for
diesel
and
LP.
H
The
average
wholesale
price
is
calculated
quarterly.
It's
a
weighted
average
done
by
the
Department
of
Revenue,
it's
weighted
by
formulation
and
the
grade,
whether
it's
in
it,
whichever
the
three
grades,
it
is
and
again
it's
nine
percent
of
the
average
wholesale
price
at
the
close
of
the
prior
year.
H
The
statutory
floor
is
two
dollars
and
Seventeen
Point
cents,
seven
cents
per
gallon
or
19.6
cents
per
gallon
on
the
tax
and
once
set
that
remains
in
effect
for
the
entire
year,
unless,
of
course,
we
have
special
circumstances
like
we
did
last
year,
you
recall
in
the
past
this.
The
motor
fuels
tax
could
change
on
a
quarterly
basis
and
in
fiscal
2016,
I
believe
or
in
2016.
That
was
changed
to
make
it
an
annual
rate,
and
it's
also
limited
to
a
10
increase
or
decrease
in
any
year.
H
This
is
the
retail
price
of
gas,
including
taxes
which
I
use
to
forecast
the
average
wholesale
price,
so
that
then,
of
course,
we
get
the
variable
portion
of
the
tax
rate
and
again,
we
see
which
is
not
unusual
with
oil
and
then
the
price
of
gasoline,
the
pessimistic
forecast
is
going
to
be
higher
than
the
control
or
the
optimistic
scenarios.
Those
other
two
scenarios
that
control
and
optimistic
are
essentially
the
same.
We
do
see
a
drop
off
from
the
high
in
2022,
but
increasing
throughout
the
forecast
period.
H
So,
looking
in
the
fiscal
23,
the
forecast,
the
quarterly
tax
rates,
I'm,
sorry
for
the
variable
portion
of
the
tax
rate,
it
was
19.6
cents.
It
was
scheduled
to
go
up
to
21.6
cents.
At
the
start
of
the
fiscal
year,
the
governor
had
an
executive,
a
regulation
freezing
that
to
prevent
it
from
increasing.
So
for
the
first
three
quarters,
the
fiscal
23,
the
tax
rate
variable
tax
rate
was
19.6
cents
per
gallon.
In
the
fourth
quarter
it
was
21.6
cents
per
gallon.
H
We
know
what
the
rate
is
going
to
be.
It's
already
been
set
for
this
year.
It
is
23.7
cents
per
gallon.
So
when
we
look
at
the
difference
in
those
tax
rates
for
the
first
three
quarters,
the
4.1
cents
in
increase
is
going
to
have
a
significant
impact
on
the
motor
fuels.
Revenue
it'll
still
increase
in
the
final
quarter,
but
the
increase
will
be
much
smaller
because
this
year,
in
the
fourth
quarter,
the
variable
portion
of
the
rate
will
be
23.7
cents
compared
to
21.6
cents
per
gallon
for
fiscal
25
and
26.
H
That
variable
portion
of
the
tax
rate
is
going
to.
We
anticipate
will
be
set
for
the
entire
fiscal
year.
It
is
set
to
decrease
in
the
control
scenario,
increasing
nine
tenths
of
a
decreasing
nine
tenths
of
a
percent
to
22.8
cents
per
gallon
and
then
increasing
in
fiscal
26
to
21
24.1
cents
per
gallon.
H
Again,
that's
primarily
due
to
that
essentially
two-year
increase
in
the
tax
rate
that
we're
we're
going
to
get
next
year
under
the
control
and
the
optimistic
small
declines,
approximately
two
and
a
half
percent
under
each
of
those.
But
in
the
past
domestic
we're
expecting
a
small
2.1
percent
increase
and
in
fiscal
26
increase
under
all
three
scenarios
anywhere
from
3.1
percent
to
6.8
percent.
H
For
those
revenues
under
the
motor
vehicle
Usage
Tax,
the
rate
is
six
percent
on
the
retail
price
of
the
vehicle.
There
is
a
reduction
on
that
for
any
trade-in
on
the
vehicle
and
I'm.
Looking
at
consumer
spending
on
light
vehicles,
I
know
Michael
showed
units
on
late
vehicle
sales,
which
are,
of
course
cars
and
light
trucks.
I'm.
H
Looking
at
the
the
spending
on
those,
so
my
the
the
the
forecasts
are
going
to
look
a
little
different,
so
you
can
see
the
motor
vehicle
usage
Revenue,
the
history
from
fiscal
10
to
fiscal
23,
and
you
can
see
a
very
significant
jump
in
fiscal
21..
We
skipped
right
over
the
500
million
dollar
range.
We
went
from
499
million
dollars
to
620
million
dollars
in
one
year
and
we've
remained
at
a
very
high
level
in
these
last
two
years.
The
increase
in
fiscal
21
was
24.4
percent.
H
Calls
for
a
slight
decrease
under
the
control,
essentially
flat,
one
tenth
of
a
percent
Decline
and
small
increases
in
the
alternative
scenarios
decreases
in
fiscal
25
of
two
and
a
half
percent,
1.6
percent
or
8.2
percent,
and
then
growth
and
the
three
percent
range
in
fiscal
26..
And
as
a
reminder
from
the
introductory
slides
that
Greg
presented.
These
do
include
legislative
impacts,
3.4
million
dollars
in
the
fiscal
24
and
8.1
million
dollars
in
each
of
the
years.
25
and
26.
H
The
weight
distance
tax,
it's
the
2.85
cents
per
mile
for
the
heavy
vehicles
traveling
through
Kentucky,
calculated
and
paid
quarterly
forecasted
using
an
industrial
duct
production
index
of
durable
goods.
H
It
is
fairly
here's
the
history
from
2010
through
last
year,
fairly
stable,
slight
increases
until
the
last
few
years,
where
we
had
did
have
some
decline.
Of
course,
we
expected
decline
in
in
20
from
Cova,
but
not
really
as
big
as
you
might
have
expected,
and
then
small
increases
in
the
last
two
years.
H
So
last
year,
weight
distance
tax,
increased
six
tenths
of
a
percent
this
year
under
the
control
and
the
optimistic
optimistic
increases
of
2.1
and
2.5
percent
small
decline
under
the
pessimistic
increases
again
in
the
in
25
under
the
control.
In
the
optimistic
decline
in
the
pessimistic
and
in
26
increases
in
all
three
scenarios.
H
H
You
can
get
a
four
or
eight
year
license
or
a
standard
credential
for
the
real
ID.
So
that's
an
increase
in
the
fees
and
I
use
an
arima
to
forecast
this.
It's
a
fairly
stable
series,
as
you'll
see
you
can
see
in
the
first
part
of
this
up
until
2005.
Very
small
increase
is
about
two
percent
annually.
There
was
an
increase,
then
in
the
license
it
jumped
straight
up
and
then
remained
at
about
15
million
with
about
a
until
2019.
H
That's
about
a
1.3
percent
annual
increase
over
that
period.
Again,
it's
very
stable.
We
had
to
drop
and
then
you
can
see
another
increase
with
the
real
ID.
Then
it's
got
an
increase
in
the
in
the
cost
of
that
and
an
extended
life
four
or
eight
years
for
those
which
is
longer
than
the
current
IDs,
so
I
went
ahead.
H
The
license
these
are
your
plates.
Primarily
it
comes
well,
it
does
come
from
Passenger
cars
and
motorcycle
license
plates
and
then
there's
a
truck
proportion
registration
fee,
which
is
part
of
the
IRP.
The
internal
or
International
I
forgot
exactly
what
it
is,
but
it's
collected
at
the
U.S
level
and
distributed
back
to
the
States
I
forecast
that
using
U.S
registered
vehicles.
H
When
you
look
at
the
history,
it
did
have
some
ups
and
downs.
Primarily
that
was
the
IRP
money.
It
came
in
lumpy.
It
didn't
come
in
all
at
once
in
any
particular
fiscal
year.
However,
in
the
last
three
years
that
has
stabilized
and
we're
seeing
more
stability
in
the
collections
on
the
license
Revenue.
H
Forecast
calls
for
essentially
two
percent
increase
under
all
scenarios
and
24
one
and
a
half
percent
in
25
and
one
and
a
half
percent
and
26
all
very
close
across
the
three
scenarios.
Each
year
the
investment
forecast
Greg
talked
significantly
about
what
they
do
on
the
general
fund.
I
will
say
that
the
road
fund
is
in
a
different
pool,
but
the
forecasting
is
the
same.
I
send
over
a
my
road
fund
forecast
to
Transportation
Personnel
in
the
budget
office.
They
have
a
model
that
they
use
to
get
investable
balances.
H
From
my
forecast.
They
send
that
back
to
me,
I
forward
that
to
Office
of
Financial
Management,
asking
them
to
apply
the
expected
interest
rates
to
that,
and
that's
where
the
forecast
comes
from.
So
the
forecast
this
year
is
for
16.3
million
dollars
falling
a
little
bit
in
25
to
8
million
dollars
and
in
fiscal
26
to
6.7
million
dollars,
and
then
the
other
receipts
are
primarily
fines
and
fees.
I
use
an
arima
I,
take
it
accounts
for
less
than
three
percent
of
the
total
Road
fund
receipts
again
the
history.
H
It
does
bounce
around
a
bit,
but
it's
it's.
The
last
few
years
it's
been
very
stabled
about
42
million
dollars,
so
the
forecast
increasing
slightly
in
each
of
the
next
years
up
to
49.8
million
in
fiscal
26.
H
These
the
total
Road
fund
forecasts
for
the
three
years,
the
control
7.2
percent
this
year,
a
decline
2.1
percent
next
year,
and
an
increase
of
2.8
percent
in
fiscal
26..
A
D
So
since
we
have
no
new
members-
and
everyone
has
seen
the
slides
before
I'm
going
to
go
through
them
very
fast,
so
we
all
know
the
master
settlement
agreement
has
been
in
fact,
in
effect,
since
1998
52,
States
and
territories
are
collectively
the
settling
States,
the
largest
manufacturers
were
the
original
participating
manufacturers
to
the
agreement,
and
those
that
have
come
along
since
are
the
subsequent
participating
manufacturers.
D
There
are
three
potential
adjustments
to
the
payments.
The
first
is
the
inflation
adjustment.
As
you
might
imagine,
for
the
first
year,
there
is
a
base,
three
percent
annual
inflation
adjustment,
so
each
year
the
cpiu
from
December
to
December
must
exceed
three
percent.
Otherwise
the
inflation
adjustment
is
three
percent.
We
are
right
now
right
at
that
level.
We
are
at
just
over
three
percent.
So,
depending
how
we
go
from
here
to
the
end
of
the
year,
we
will
receive
either
the
three
percent.
D
If
inflation
falls
back
or
we
will
receive
the
actual,
and
when
this
forecast
was
prepared,
we
were
under
three
percent,
and
so
I
had
assumed
three
percent
inflation,
the
base
level
in
all
years,
the
volume
adjustment
which,
up
until
just
a
few
years
ago,
it
was
quite
simply
as
cigarette
sales
were
lost
by
the
participating
manufacturers
to
those
non-participating
manufacturers.
The
amount
of
the
payment
was
reduced.
The
amount
of
the
volume
reduction
is
now
such
without
the
inflation
adjustment.
D
There
would
be
no
MSA,
they
have
lost
so
many
sales
that
it
would
essentially
be
negative,
and
so
the
inflation
adjustment
keeps
the
numbers
into
the
positive.
The
volume
adjustment
would
by
itself
drag
it
below
zero,
but
the
two
balance
out
to
our
current
amount
that
is
distributed
across
all
parties.
However,
a
few
years
ago,
a
small
part
of
the
MSA
started
to
become
more
important,
and
that
is
the
what's
known
as
The
Profit
adjustment.
D
It
actually
is
related
to
the
volume
adjustment,
but
what
it
says
is
that
we're
going
to
look
back
at
your
1996
operating
revenues,
we're
going
to
grow
them
by
actual
inflation
and
if
you
have
become
more
profitable
under
the
time
period
of
this
agreement,
we
will
reduce
the
volume
adjustment,
so
lots
of
profits
means
you
get
less
of
a
volume
adjustment
and
a
couple
of
times,
2018
I
believe
you
know
30
million
dollars
now
we're
talking
on
a
seven
billion
dollar
base.
You
know
they
reduced
it
by
30
million
dollars.
D
D
We
have
actually
seen
in
the
last
few
years
there
have
been
firms
removing
themselves
from
the
American
cigarette
market
and,
as
you
might
imagine,
the
firms
that
decided
is
no
longer
profitable
for
them
to
operate
or
no
longer
desirable
for
them
to
operate
in
the
United
States
when
they
leave
the
kinds
of
folks
who
are
out
there
buying
their
cigarettes
do
not
suddenly
switch
over
to
Marlboros.
They
typically
go
with
a
cheaper
brand,
which
is
everything
else.
We
can
equal,
often
a
non-participating
manufacturer's
product.
As
a
result,
we
have
been
seeing
larger
and
larger
amounts.
D
The
current
sales
year
number
that
we
have
available
the
amount
that
would
be
in
dispute
for
states
that
have
not
settled
the
npm
adjustment
would
be
approximately
1.5
billion
dollars
of
again
that
approximate
seven
billion
dollar
base
payment.
That
needs
to
be
decided
and,
as
you
may
recall,
they've
been
working
diligently.
That's
kind
of
a
pun
for
those
of
us
who
deal
with
the
diligent
enforcement
question
to
work
their
way
through
the
back
years.
They've
now
made
it
to
2
2004.
D
You
may
recall
in
2014
we
were
found
to
be
not
diligent
in
the
2003
npm
adjustment
decision.
I,
don't
think
any
of
us
are
going
to
be
around
by
the
time
they
catch
up
to
the
current
sales
year.
It's
at
least
not
doing
this
business,
and
so,
needless
to
say,
we
have
been
in
talks
to
settle
these
years.
D
We
are,
in
current
talks
to
settle
the
npm
adjustment
for
the
next
several
years
and
possibly
at
a
percentage
split
that
is
more
favorable
to
the
Commonwealth,
but
we
have
settled
all
disputes
up
through
the
calendar
22
sales
year,
so
we
have
have
not
yet
had
that
agreement
with
the
opms
and
spms.
Therefore,
I
have
not
included
that
in
this
current
estimate.
I
do
think
that
will
be
in
place
when
we
are
back
here
in
December.
D
D
People
must
have
been
nervous,
but
now
we've
seen
nine
and
eleven
percent
annual
drops.
Since
so
the
it
is
picking
up
and
whether
it's
people
switching
to
vaping
or
maybe
improving
their
health
and
switching
from
using
any
tobacco-related
products,
we
are
now
seeing
much
smaller
overall
volumes,
which
again
is
going
to
impact
the
sales
and
the
subsequent
MSA
payments.
D
So
my
current
estimates
much
in
line
with
what
the
National
Association
of
attorney
generals
is
also
telling
states
that
we
would
be
seeing
approximately
102.6
million
in
fiscal
24.,
97.3
million
in
fiscal
25
and
92.5
million
in
fiscal
26,
and
we
do
not
prepare
a
range
of
estimates.
There
is
no
optimistic
nor
pessimistic
forecast
for
the
MSA,
but,
like
I
said
when
we
come
back
in
December,
we'll
have
a
better
idea
where
we
are
on
the
inflation
adjustment
and
there's
a
very
good
chance.