Cayman’s top finance officials have
explained in greater detail how they arrived at a projected public sector
operating deficit of $56.1 million by the end of the current budget year.
The $56.1 million figure is
essentially the government’s best estimate based on current economic data as to
how it will end the budget year on 30 June, 2010.
It is a separate figure entirely
from the one released by officials last week that put government’s operating
deficit at $73.1 million for the first six months of the fiscal year. The $73.1
million is an actual number, based on public sector revenue and expenditures
from 1 July through 31 December, 2009.
Finance officials said they have
received a number of questions about how the budget deficit figure for 31
December could be lower than the one projected for 30 June, six months later.
There are two reasons: first,
Cayman’s highest-earning revenue months are typically January, February and
March – the peak of tourist season and also when the majority of fees charged
to the financial industry come due.
Second, government has estimated
some $9 million in public sector expenditure cuts will take effect between now
and 30 June. Premier McKeeva Bush has said he’s not satisfied with $9 million
in reductions and would seek to further reduce public sector costs.
One such plan to do that is the
possible reduction of salaries for civil servants making at least $3,000 per
Mr. Bush also told the Legislative
Assembly on Monday that January revenue receipts did not meet with government’s
The revised forecasts done on 23
February were as follows:
*Government operating revenues as
of 30 June were projected to be CI $490 million for central government.
*Central government operating
expenditures were estimated to come in at $516, including the $9 million cut in
*Additional financing expenses of
$26 million, mainly due to on-going public construction projects.
*Extraordinary expenses of $4
million, including repair and recovery costs from Hurricane Paloma and legal
costs for the Justice Priya Levers case.
*An estimated operating deficit for
statutory authorities and of $6.3 million.
*A $6 million expense reduction in
unexplained “other items”.
The total deficit from central
government operations would be $26 million, according to Financial Secretary
Kenneth Jefferson. However, adding in the other expenses the projected deficit
would total $56.1 million by the end of the budget year.