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2021 ANNUAL REPORT Budget Revenue Expenditures Contents An Overview of FY 2021 ............................................................................................................................................................. 1 FY 2021 Financial Revenue ........................................................................................................................................................ 2 General Fund Revenue (5) Major Categories ............................................................................................................................ 3 Real Property (2011-2021) ............................................................................................................................................................. 3 Individual Income (2011-2021) ...................................................................................................................................................... 4 Corporate Income (2011-2021)...................................................................................................................................................... 5 Excise Tax (2011-2021) ................................................................................................................................................................... 6 Gross Receipts (2011-2021) ........................................................................................................................................................... 7 Percentage of (5) Major Tax Categories Collections for FY 2021 ............................................................................................. 8 Expenditures .............................................................................................................................................................................. 9 Salaries ........................................................................................................................................................................................... 9 Fringe ........................................................................................................................................................................................... 10 Other Services .............................................................................................................................................................................. 11 Capital Projects ............................................................................................................................................................................ 12 FY 2020 Annual Report Office of Management and Budget 1 Budget Revenue Expenditures An Overview of FY 2021 The purpose of this annual public report on the Territory’s revenues is twofold. Firstly, it ensures that the Territory is consistently monitoring its revenues and expenditures to allow for proactive responses to unanticipated changes or emerging trends. Secondly, this report lends credibility to the Government’s efforts at increasing transparency of the Territory’s finances. It is the Office of Management and Budget’s (OMB) belief that the government is accountable to its taxpayers to use revenues collected in an efficient and effective manner. This report provides taxpayers with the information they need to hold the government to this standard. This report will highlight any notable trends as well as some initial insight into the post COVID-19 as safety protocols were lifted in Sept. 2020. In FY 2021, the Territory’s economy began to stabilize led by the growth in our tourism industry, business community, and under the prudent fiscal policies established by executive leadership with the adoption of the FY 2021 balanced budget. With a balanced budget funding was allocated for funding community services and the development for capital projects focused on increasing sustainability and supporting the Territory’s growing business community with a focus for promoting diversity. The Territory saw an overall decrease of 3% in Total Operating Income. Specifically, Total Taxes decreased by 3% and Other Revenues decreased by 9%. The most notable decrease is found in Real Property Tax by 40% and Miscellaneous Revenues by 68%. Increases are found in Corporate Income by 6%, Excise and Trade by 973%, and Stamp Tax by 38%. The Total Revenues as of September FY2021 was $1.5B compared to $928.3M for FY2020. From a cash flow perspective, at the end of the fourth quarter FY 2021, specifically the week ended October 1, 2021, the Territory had a Total Operating Cash Flow of flow of $7 M, Net Cash Flow of $29M and a positive cash balance of $161.0 M with 59 days cash on hand. The information provided in this report is the most accurate available as of the date of composition. Furthermore, the report does not purport to be audited financial statements and as such, the numbers are preliminary and subject to change. The information provided here are not final. For final numbers, please refer to the Financial Audit Report from the Department of Finance. This annual report will focus entirely on the performance of the major revenue and expenditure categories for the General Fund. For all other major funds, a listing of the fund balance and legislative authority establishing those funds can be found in the Budget Book published on OMB’s website. Subsequent iteration of the report will endeavor to include analysis of collections beyond the General Fund and a comparable exploration of the Territory’s expenditures from said funds. The major revenue categories explored here are Real Property, Individual Income, Corporate Income, Excise Tax and Gross Receipts. These revenue streams have historically been the most significant contributors to the General Fund. Revenues outside operating income are considered to the extent they provide a complete picture of the Territory’s General Fund collections; specifically, the transfers to the General Fund. FY 2020 Annual Report Office of Management and Budget 2 Budget Revenue Expenditures FY 2021 Financial Revenue Detail of Financial Revenue General Fund Revenue Detail FY 2021 Legislative Appropriation FY 2021 Preliminary Actuals Income Taxes Individual Income $407,081,888 $447,616,304 Corporate Income $60,700,000 $72,532,012 Total Income Taxes $467,781,888 $520,148,316 Other Taxes Real Property $53,000,000 $35,688,234 Payment in lieu of Taxes - - Trade & Excise $3,540,429 $20,225,140 Gross Receipts $250,077,717 $237,935,898 Inheritance Tax - FSC Franchise $152 - Corporate Franchise $1,625,128 $4,175,370 Stamp Tax $9,825,611 $13,281,124 Total Other Taxes $318,069,037 $311,305,765 Other Revenues Malpractice Insurance $3,954 4,313 Licenses $3,115,870 $3,970,142 Fees & Permits $6,582,468 $6,970,817 Lime Tree (Refinery) $14,000,000 $2,379,405 Lime Tree Terminal Fee $11,000,000 $9,440,934 Franchise Fees $802,337 $725,752 U.S. Customer Duties $3,462,488 $1,083,015 All Other $12,796,787 $12,417,433 Miscellaneous Service Charge $1,318,705 $1,916,560 Total Other Revenues $53,082,609 $38,908,371 Total Gross Revenue* $838,933,534 $870,362,452 *Does not include Refund, Transfers In, Transfers Out, Revenues from Anticipated Projects or Other Financing Sources Revenue Summary by Category Revenue Summary by Category FY 2021 Legislative Appropriation FY 2021 Preliminary Actuals Income Taxes $467,781,888 $520,148,316 Other Taxes $318,069,037 $311,305,765 Other Revenues $53,082,609 $38,908,371 Transfers In $76,336,675 $66,616,533 Transfers Out ($76,634,649) ($77,271,996) Other Financing Sources $56,870,208 $74,489,296 Total Gross Revenues* $838,933,534 $870,362,452 Total Net Revenues $900,343,742 $ 859,196,288 *Does not include Refund, Transfers In, Transfers Out, Revenues from Anticipated Projects or Other Financing Sources FY 2020 Annual Report Office of Management and Budget 3 Budget Revenue Expenditures General Fund Revenue (5) Major Categories 39,840,117 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Real Property (2011-2021) St. Thomas FY 2021 vs FY 2020 St. Croix FY 2021 vs FY 2020 -39% -20% Real Property FY 2021 Annual Report Office of Management and Budget 4 Budget Revenue Expenditures 447,616,304 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Individual Income (2011-2021) St. Thomas FY 2021 vs FY 2020 St. Croix FY 2021 vs FY 2020 6% -16% Individual Income FY 2021 Annual Report Office of Management and Budget 5 Budget Revenue Expenditures 72,532,012 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 St. Thomas FY 2021 vs FY 2020 -7% Corporate Income St. Croix FY 2021 vs FY 2020 -0.4% Corporate Income (2011-2021) FY 2021 Annual Report Office of Management and Budget 6 Budget Revenue Expenditures 20,225,140 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Excise Tax Excise Tax (2011-2021) St. Thomas FY 2021 vs FY 2020 St. Croix FY 2021 vs FY 2020 885% 1911% FY 2021 Annual Report Office of Management and Budget 7 Budget Revenue Expenditures 238,547,581 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Gross Receipts (2011-2021) Gross Receipts St. Thomas FY 2021 vs FY 2020 St. Croix FY 2021 vs FY 2020 11% -32% FY 2021 Annual Report Office of Management and Budget 8 Budget Revenue Expenditures 29% 2% 9% 55% 5% Gross Receipt Excise Corporate Income Individual Income Percentage of (5) Major Tax Categories Collections for FY 2021 FY 2021 Annual Report Office of Management and Budget 9 Budget Revenue Expenditures Expenditures Salaries (October 2020- September 2021) FY 2021 Annual Report Office of Management and Budget 10 Budget Revenue Expenditures Fringe (October 2020- September 2021) FY 2021 Annual Report Office of Management and Budget 11 Budget Revenue Expenditures Other Services (October 2020- September 2021) FY 2021 Annual Report Office of Management and Budget 12 Budget Revenue Expenditures Capital Projects (October 2020- September 2021) FY 2020 Annual Report Office of Management and Budget 13 Budget Revenue Expenditures Expenditures FY 2021 vs FY 2020 Salaries increased by 15% Fringe increased by 27% Other Services decreased by 53% Capital Projects increased by 138% 15% 27% -53% 138%