The Cayman Islands Legislative Assembly on Friday unanimously approved $484 million in operating and financing expenses for the upcoming budget year, including an additional $2.6 million for education programmes which were not part of the initial spending proposal.
The government’s budget does not include any new revenue measures for the fiscal year which begins 1 July.
However, legislators approved $129 million in new borrowing and agreed to reduce the country’s operating surplus to just under $15 million.
The only changes to the budget as it was first proposed included $1.1 million in additional private school funding, and $1.5 million for vocational programmes at the University College of the Cayman Islands.
The borrowing will help finance an ambitious $100 million construction programme which includes some $35.5 million to begin the construction of four new schools.
In addition, $18 million was set aside for the new government office building project, $9 million will go for road improvements, $3.8 million will be spent on sports facilities, and $3 million apiece will go toward a new civic centre in Bodden Town and a new Summary Court building.
More than $14 million went to public safety projects like the planned Newlands marine base, and the Bodden Town emergency response centre. The Royal Cayman Islands Police Service was given $1.8 million to purchase a helicopter, and $1.5 million went for new vehicles at the Cayman Islands Fire Service.
The largest single area of expenditure in the operating budget was for the Ministry of Education, Training, Employment, Youth, Sports and Culture. It was given more than $130 million.
The Ministry of Health and Human Services was given just under $84 million, which includes an $11.2 million cash bail out for the Health Services Authority to cover its operating losses.
The government’s overall expenses for next year are expected to total just under $664 million, including funding for statutory authorities and government companies.
Although no lawmakers voted against the spending plan, some voiced concern about how much the government is borrowing. Cayman’s central government public debt is expected to reach about $295 million when the budget year ends 30 June, 2008.
The overall increase in operating costs was also made an issue. Opposition MLA Rolston Anglin said those costs had escalated 65 per cent over the past five years.
Financial Secretary Kenneth Jefferson said both the borrowing and the expenditure were well within the legally required limits. Mr. Jefferson noted the government will have enough cash as of 1 July to operate for 75 days without taking in any more money.
Moody’s Investors Service raised its debt ratings for the Cayman Islands to Aaa and Aa3 in August, which Mr. Jefferson said were ‘exceptional and high-grade ratings.’ A better debt rating allows entities to pay lower interest rates on borrowed money.
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