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2022 ANNUAL REPORT Budget Revenue Expenditures Contents An Overview of FY 2022 ....................................................................................................................................................... 1 FY 2022 Financial Revenue.................................................................................................................................................. 2 General Fund Revenue (5) Major Categories ....................................................................................................................... 3 Real Property ................................................................................................................................................................................... 3 Individual Income............................................................................................................................................................................ 4 Corporate Income ........................................................................................................................................................................... 5 Excise Tax......................................................................................................................................................................................... 6 Gross Receipts ................................................................................................................................................................................. 7 Percentage of (5) Major Tax Categories Collections for FY 2022 ......................................................................................... 8 Expenditures ...................................................................................................................................................................... 9 Salaries ............................................................................................................................................................................................ 9 Fringe ............................................................................................................................................................................................. 10 Other Services ............................................................................................................................................................................... 11 Capital Projects ............................................................................................................................................................................. 12 FY 2022 Annual Report Office of Management and Budget 1 Budget Revenue Expenditures An Overview of FY 2022 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 annual report contains an overview of the Territory’s actual collection of General Fund revenues for FY 2022, as compared to FY 2021 and a view of FY 2022 expenditures by quarter. This report will highlight notable trends as well as some initial insight as the Territory recovers from the COVID-19 pandemic. The Territory’s economy during FY 2022 has stabilized and strengthened, our business community has begun to diversify, and government operations has expanded the use of technology to increase efficiency in daily operations. The Administration’s approach to the FY 2022 budget process was cautious and realistically conservative. The prudence of a conservative FY 2022 budget allowed for the Administration to continue to provide, expand, and strengthen services for the community, as well as to fund capital projects. For FY 2022 the Territory saw overall Total Operating Income collections increase by 7%. Specifically, Total Taxes increased by 7%. Notable increases were seen in Excise Tax at 82%, Corporate Income at 50%, Individual Income at 3%. The large increase in Excise Taxes can be attributed to the resumption of collections in January FY21. By contrast the most notable reductions in taxes were Gross Receipts at 7%. Other revenues with notable increases were Fines, Forfeits, and Penalties at 54%, and Licenses at 20%, and notable reductions were the Environmental Impact Fee at 53% and Custom Dues at 21%. 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 2022 Annual Report Office of Management and Budget 2 Budget Revenue Expenditures FY 2022 Financial Revenue Detail of Financial Revenue General Fund Revenue Detail FY 2022 Legislative Appropriation FY 2022 Preliminary Actuals Income Taxes Individual Income $425,000,000 $462,425,910 Corporate Income $65,000,000 $109,153,900 Total Income Taxes $490,000,000 $571,579,810 Other Taxes Real Property $60,000,000 $50,238,879 Payment in lieu of Taxes - - Trade & Excise $38,000,000 $36,718,044 Gross Receipts $239,000,000 $221,549,326 Inheritance Tax - FSC Franchise - Corporate Franchise $5,400,000 $4,943,287 Stamp Tax $8,900,000 $17,544,471 Total Other Taxes $351,300,000 $330,994,007 Other Revenues Malpractice Insurance $4,700 - Licenses $4,500,000 $4,756,334 Fees & Permits $7,600,000 $8,142,102 Lime Tree (Refinery) - Lime Tree Terminal Fee $11,000,000 $21,121,258 Franchise Fees $580,000 $799,960 U.S. Customer Duties $3,900,000 $855,133 All Other $5,632,579 $6,316,048 Miscellaneous Service Charge $5,891,361 $2,527,189 Total Other Revenues $39,108,639 $44,518,024 Total Gross Revenue* $880,408,639 $947,091,839 *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 2022 Legislative Appropriation FY 2022 Preliminary Actuals Income Taxes $490,000,000 $571,579,810 Other Taxes $351,300,000 $330,994,007 Other Revenues $39,108,639 $44,518,024 Transfers In $81,472,472 $82,389,023 Transfers Out ($84,954,965) ($166,945,925) Other Financing Sources $30,000,000 $8,867,059 Total Gross Revenues* $880,408,639 $947,091,839 Total Net Revenues $933,182,249 $ 796,401,998 *Does not include Refund, Transfers In, Transfers Out, Revenues from Anticipated Projects or Other Financing Sources FY 2022 Annual Report Office of Management and Budget 3 Budget Revenue Expenditures General Fund Revenue (5) Major Categories 50,238,878 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Real Property (2012-2022) St. Thomas FY 2022 vs FY 2021 St. Croix FY 2022 vs FY 2021 53% 14% Real Property FY 2022 Annual Report Office of Management and Budget 4 Budget Revenue Expenditures 462,425,910 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Individual Income (2012-2022) St. Thomas FY 2022 vs FY 2021 St. Croix FY 2022 vs FY 2021 9% -12% Individual Income FY 2022 Annual Report Office of Management and Budget 5 Budget Revenue Expenditures 109,153,900 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 St. Thomas FY 2022 vs FY 2021 83% Corporate Income St. Croix FY 2022 vs FY 2021 -6% Corporate Income (2012-2022) FY 2022 Annual Report Office of Management and Budget 6 Budget Revenue Expenditures 36,718,044 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Excise Tax Excise Tax (2012-2022) St. Thomas FY 2022 vs FY 2021 St. Croix FY 2022 vs FY 2021 71% 22% FY 2022 Annual Report Office of Management and Budget 7 Budget Revenue Expenditures 221,549,326 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Gross Receipts (2012-2022) Gross Receipts St. Thomas FY 2022 vs FY 2021 St. Croix FY 2022 vs FY 2021 0.12% -22% FY 2022 Annual Report Office of Management and Budget 8 Budget Revenue Expenditures 26% 4% 13% 53% 4% Gross Receipt Excise Corporate Income Individual Income Real Property Percentage of (5) Major Tax Categories Collections for FY 2022 FY 2022 Annual Report Office of Management and Budget 9 Budget Revenue Expenditures Expenditures GENERAL GOVERNMENT HEALTH & HUMAN SERVICES TRANSPORT. & FACILITIES PUBLIC SAFETY EDUCATION CULTURE & RECREATION 1st Quarter $67,472,001 $3,095,930 $1,460,121 $10,814,090 $20,672,459 $913,699 2nd Quarter $47,070,261 $4,745,235 $2,441,965 $17,866,217 $32,716,117 $1,503,865 3rd Quarter $48,209,880 $4,718,914 $2,409,392 $19,060,445 $35,841,440 $1,579,378 4th Quarter $75,513,212 $3,362,403 $2,409,392 $13,426,713 $33,219,219 $1,319,253 $- $10,000,000 $20,000,000 $30,000,000 $40,000,000 $50,000,000 $60,000,000 $70,000,000 $80,000,000 53% 4% 2% 14% 27% 1% % of Salaries FY 2022 GENERAL GOVERNMENT HEALTH & HUMAN SERVICES TRANSPORT. & FACILITIES PUBLIC SAFETY EDUCATION CULTURE & RECREATION Salaries (October 2021- September 2022) FY 2022 Annual Report Office of Management and Budget 10 Budget Revenue Expenditures GENERAL GOVERNMENT HEALTH & HUMAN SERVICES TRANSPORT. & FACILITIES PUBLIC SAFETY EDUCATION CULTURE & RECREATION 1st Quarter $13,512,019 $1,138,813 $648,343 $2,603,294 $9,622,693 $471,755 2nd Quarter $19,240,610 $2,038,755 $1,153,385 $5,169,385 $16,401,218 $861,519 3rd Quarter $20,265,354 $2,056,720 $1,262,282 $5,854,234 $17,849,348 $898,999 4th Quarter $22,604,852 $5,557,846 $1,262,282 $4,268,601 $15,737,633 $749,549 $- $5,000,000 $10,000,000 $15,000,000 $20,000,000 $25,000,000 44% 6% 3% 10% 35% 2% % of Fringe for 2022 GENERAL GOVERNMENT HEALTH & HUMAN SERVICES TRANSPORT. & FACILITIES PUBLIC SAFETY EDUCATION CULTURE & RECREATION Fringe (October 2021- September 2022) FY 2022 Annual Report Office of Management and Budget 11 Budget Revenue Expenditures GENERAL GOVERNMENT HEALTH & HUMAN SERVICES TRANSPORT. & FACILITIES PUBLIC SAFETY EDUCATION CULTURE & RECREATION 1st Quarter $25,090,479 $1,928,977 $2,449,686 $942,528 $2,603,829 $107,135 2nd Quarter $32,837,620 $2,617,511 $2,422,978 $1,771,664 $3,557,368 $212,374 3rd Quarer $30,880,847 $3,055,548 $3,245,749 $1,843,373 $3,689,318 $80,440 4th Quarter $54,155,488 $2,218,377 $269,985 $1,352,798 $3,092,912 $215,952 $- $10,000,000 $20,000,000 $30,000,000 $40,000,000 $50,000,000 $60,000,000 79% 5% 5% 3% 7% 0% % of Other Services for 2022 GENERAL GOVERNMENT HEALTH & HUMAN SERVICES TRANSPORT. & FACILITIES PUBLIC SAFETY EDUCATION CULTURE & RECREATION Other Services (October 2021- September 2022) FY 2022 Annual Report Office of Management and Budget 12 Budget Revenue Expenditures GENERAL GOVERNMENT HEALTH & HUMAN SERVICES TRANSPORT. & FACILITIES PUBLIC SAFETY EDUCATION CULTURE & RECREATION 1st Quarter $332,776 $- $62,623 $213,357 $- $14,806 2nd Quarter $993,809 $31,980 $35,880 $422,744 $- $352,456 3rd Quarter $828,889 $63,960 $122,526 $301,888 $- $95,940 4th Quarter $1,523,399 $- $122,526 $153,563 $55,087 $28,300 $- $200,000 $400,000 $600,000 $800,000 $1,000,000 $1,200,000 $1,400,000 $1,600,000 64% 2% 6% 19% 1% 9% %of Capital Projects for 2022 GENERAL GOVERNMENT HEALTH & HUMAN SERVICES TRANSPORT. & FACILITIES PUBLIC SAFETY EDUCATION CULTURE & RECREATION Capital Projects (October 2021- September 2022) FY 2022 Annual Report Office of Management and Budget 13 Budget Revenue Expenditures 33% 3% -73% Expenditures FY 2022 vs FY 2021 51% Salaries increased by 51% Fringe increased by 33% Other Services increased by 3% Capital Projects decreased by 73%