Cayman OK’s $676M budget

Cayman Islands lawmakers approved a spending plan Wednesday just a few days before the statutorily imposed deadline of 30 June following more than a month of debate.

Despite a record level of borrowing, government was forced to delay several major projects including the construction of three new high schools on Grand Cayman.

The three high schools and a new elementary school in George Town are now expected to be completed by September 2010.

A cost of living pay increase for civil servants was promised during Leader of Government Business Kurt Tibbetts policy address in late April, however there was no debate on the issue during Finance Committee.

Deputy Head of the Civil Service Peter Gough said the proposed pay hike was dependent on each department meeting its budget targets for the end of the year. He said it won’t be known whether those targets have been met prior to 1 July.

Government’s total expenses were budgeted at just more than $676 million, with central government costs budgeted at just above $501 million.

Borrowing for the fiscal year that begins 1 July and ends 30 June, 2009, could reach $154 million. Core government debt by 30 June, 2009, was projected to be $412 million. The country’s entire public sector debt was expected to be more than $650 million by that time, not counting government’s obligations to the public employee’s pension system.

Financial planners were also expecting to cover some major operating losses in the upcoming budget, including a projected $7.6 million for the Health Services Authority and $6.9 million to support Boatswain’s Beach.

Financial Secretary Kenneth Jefferson said he expected Cayman would have an operating surplus of $13.5 million at the end of the year.

Although the upcoming year was expected to be tight, with a weakening US economy and anticipated growth in the unemployment rate, Mr. Tibbetts said he did not expect job losses within the government and that no new revenue measures were being proposed.

‘These accomplishments are significant given the global challenges that exist,’ Mr. Jefferson said.

Members of the opposition party have called the spending plan an election year budget and have publicly express concerns about the amount of borrowing government is undertaking.

‘They have not been fiscally prudent,’ said Opposition Leader McKeeva Bush.

Mr. Jefferson said the plan met all required principles of responsible financial management and gave the country a balanced budget with a cash surplus.

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