Cayman budget plan cutting it close

The next Cayman Islands government budget is tentatively scheduled to be presented to the Legislative Assembly on May 30, about a month before local law requires approval of the spending plan.

Representatives of Premier Alden McLaughlin’s office said Tuesday that the date had been set, pending the formal approval of the U.K. Foreign and Commonwealth Office. That means, following presentation, elected officials would be left with about four weeks to review the plan prior to passage.

The budget is expected to contain targeted pay increases for civil servants rather than an across-the-board pay hike to cover the cost of living as was done in the last fiscal year. However, government officials have also contemplated plans for an additional cost-of-living pay raise in later years to compensate for a proposed co-pay for healthcare premiums set to take effect in 2018. That pay hike, if instituted, would be left in the hands of the next government administration.

Finance Minister Marco Archer has warned that the budget’s operating surplus in the upcoming spending plan will be smaller than in the last two government fiscal years, largely because the 2016/17 proposal will cover 18 months, rather than the typical 12.

The 18-month budget is a transition, according to the finance minister, as Cayman switches its government budgets to a two-year cycle. The next budget year will run between July 1, 2016 and Dec. 31, 2017. After that, the government will issue two-year budgets starting Jan. 1 of one year and ending Dec. 31 of the next.

The period between July 2016 and December 2017 will contain only one “high earning” revenue period between January and April. Typically, the government takes in most of its annual revenue during the first few months of the calendar year when tourism revenues are at their peak and when most financial services-related company fees are due. The 18-month budget will contain two “low revenue” periods – during the tourism off-season, normally between August and November – when government revenues tend to shrink.

“Except for the operational surplus, the performance [for the 18-month budget] is as good or better than in previous years,” Mr. Archer said.

The 2016/17 budget plan does not include any proposals to borrow money or to add new government fees.

Mr. Archer acknowledged there could be some difficulty for lawmakers comparing this year’s 12-month budget to the upcoming 18-month spending plan. To ease that comparison process, Mr. Archer said, the current budget numbers would be estimated on an 18-month spending timeline, including budget planners’ best guess at what another six months of spending might have looked like.

Opposition Leader McKeeva Bush and independent North Side MLA Ezzard Miller have objected to the change to multiyear budgeting, stating it does not allow for proper scrutiny of government accounts until it is “too late.”

Co-pay concerns

A number of measures to combat the ever-rising cost of health insurance for government workers are expected to be presented to lawmakers during this budget cycle and the next one, Mr. Archer said.

The most immediate will be a change in the retirement age for civil servants, from 60 to 65, which officials could vote on during the May-June legislative meeting. The longer working life will equate to more payments into the healthcare system, easing some of the future liability the government is carrying with regard to health insurance.

It will not happen during the 2016/17 budget, but lawmakers are anticipating that the civil service will enact rules to require public sector employees to pay for a portion of their healthcare premiums. Exactly how much that would cost and who would pay the monthly charge is still up for discussion, Mr. Archer said.
Earlier this year, Minister Archer said annual healthcare costs would eventually end up overwhelming the public sector budget if no changes were made to the funding structure.



  1. Mr Premier what you should do is investigate all the money that was dumped in the bushes on the Ashford House and By Pass Road in Bodden Town leading from Look our Garden to the Harry McCoy Park; by your Bodden Town Progressive Government. Do you really thing no one was watching what was going on behind the bushes.
    There would have been no need for close cutting budgets, if proper planning and decisions were made, instead of thinking that you could have gotten away unnoticed.
    I just wish persons who read about this every day would take a drive down Gun Square to the Mission House and then get out of your car and see what I am talking about. In fact from the time you hit the area of the Guns you will be astonished at the road side debris. All it needs is a match.. Where is the government departments to have their road sides cleaned. Large dumps in peoples front yards with rats running across the road. Where is this elite Group headed up by Crosby Solomon , Heather Bodden and others posing in the papers for pictures. Cleaning up where? Around the Progressive building? Una just knock it off.


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