Cayman Islands lawmakers will meet on Friday to consider and possibly approve enough cash to keep the government operating through the first few months of this year.
The move, known as a continuing appropriation or pre-appropriation, allows government to keep spending at similar levels that had been approved in the previous year’s budget. In Cayman, the government’s budget year runs from 1 July to 30 June of the following year.
The continuing appropriation is needed largely because the new government, elected on 20 May, simply would not have had enough time to review all government departments, draw up a spending plan and have it approved before the financial year ends on 30 June.
Documents obtained by the Caymanian Compass stated that the proposed $544 million continuing appropriation would consist of $282 million in central government borrowings and overdraft approvals; $150 million in spending for output groups or general government operations; $14.7 million in transfer payments; $6.2 million in financing expenses; $61.1 million in equity investments; $19 million in executive assets; $11.6 million in other executive expenses and $424,999 in loans made.
The appropriations are expected to get Cayman through the four-month period between 1 July and 31 October.
According to Deputy Leader of Government Business Rolston Anglin, the appropriation must be approved ‘or we can’t spend any money after June 30th.’
The Public Management and Finance Law allows for a pre-appropriation in these types of cases that can last up to 120 days, about one-third of the entire fiscal year. Basically, government is covered through July, August, September and October if need be, while details of a new budget are worked out.
Mr. Anglin said it shouldn’t take government that long to get its affairs in order.
‘We would hope we can get down to the Legislative Assembly sometime in September to do it,’ he said. ‘The quicker we can get it done, the better for us.’
In some cases, it’s not as simple as just taking what government spent the previous year, dividing it into thirds and leaving that amount. Mr. Anglin said some government departments and projects will require less, others will need more at the front end of the year.
‘For instance, half of the (government-sponsored) scholarships will be spent in August, so we’ll have to pay for that,’ he said.
Specific expenses are laid out in documents that will be presented to the Legislative Assembly on Friday.
Former Leader of Government Business and now-Opposition Leader Kurt Tibbetts has previously acknowledged the need for a continuing appropriation to get through the early part of the budget year following the May elections.
‘We used to have to do it every election year,’ Mr. Tibbetts said earlier this year.
Until 2003, the Cayman Islands budget year began in January and ran through December. Elections were previously held in November, and lawmakers found themselves debating a spending plan not knowing if government would be forced to implement the policies of out-going leaders.
The budget year was changed from 1 July to 30 June to accommodate the election cycle. However, in September 2004, Hurricane Ivan devastated Grand Cayman and forced the government to post-pone elections until May 2005.
Elections were again held in May this year.
‘Which brings it back to the same process you were trying to avoid in the first place,’ Mr. Tibbetts said.