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2020 ANNUAL REPORT FY 2020 Annual Report Office of Management and Budget 1 Contents An Overview of FY 2020 ............................................................................................................................................................. 2 FY 2020 Financial Revenue ........................................................................................................................................................ 3 General Fund Revenue (5) Major Categories ............................................................................................................................ 4 Real Property ................................................................................................................................................................................. 4 Individual Income .......................................................................................................................................................................... 5 Corporate Income .......................................................................................................................................................................... 6 Excise Tax ....................................................................................................................................................................................... 7 Gross Receipts................................................................................................................................................................................ 8 Percentage of (5) Major Tax Categories Collections for FY 2020 ............................................................................................. 9 Expenditures ............................................................................................................................................................................ 10 Salaries ......................................................................................................................................................................................... 10 Fringe ........................................................................................................................................................................................... 11 Other Services .............................................................................................................................................................................. 12 Capital Projects ............................................................................................................................................................................ 13 FY 2020 Annual Report Office of Management and Budget 2 Budget Revenue Expenditures An Overview of FY 2020 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 2020, as compared to FY 2019 and a view of FY 2020expenditures by quarter. This report will highlight any notable trends as well as some initial insight into the impact of the economic consequences imposed by the COVID-19 pandemic during Governor Albert Bryan’s Executive Order for a “Safer At Home” Phase. During this phase, the Governor enforced that non-essential businesses to remain open, bars to close, restaurants to only provide to-go orders as well as hotel reservation systems to remain closed; until Sept.19, 2020. With two quarters remaining during the fiscal year after the executive order, the territory expected to experience a huge decline with revenues and an increase in expenditures to assist with the new Covid-19 safety protocols: not only in comparison to FY 2019, but overall. As the territory continued to balance the new norm of Covid-19, the pace of collections was surprisingly good. The territory managed to surpass FY 2019 collections in three out of five major general fund categories for St. Thomas/St. John and four out of five for St. Croix. For FY 2020, the Territory saw an overall increase of 4% in Total Operating Income. Specifically, Total Taxes increased by 6%, however, Total Other Revenues decreased by 23%. The most notable increase was seen in Miscellaneous Revenue at 727%, Real Property at 33% and Gross Receipts at 11%. By contrast the most notable reductions were Excise Tax at 88%, Stamp Tax at 62% and Corporate Franchise at 46%. With assistance of CARES Act and GVI Stimulus Funds, Total Revenues in the General Fund increased by 13% at the end of the fourth quarter. The Total Revenues as of September FY2020 was $1B compared to $957.9M for FY2019. From a cash flow perspective, at the end of the fourth quarter FY 2020, specifically the week ended October 2, 2020, the Territory had a negative cash flow of $7 million and a positive cash balance of $155.8 million with 58 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 is 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 3 Budget Revenue Expenditures FY 2020 Financial Revenue Detail of Financial Revenue General Fund Revenue Detail FY 2020 Legislative Appropriation FY 2020 Preliminary Actuals Income Taxes Individual Income $453,000,000 $455,507,770 Corporate Income $63,100,000 $68,700 Total Income Taxes $451,100,000 $455,046,619 Other Taxes Real Property $61,700,000 $54,872,425 Payment in lieu of Taxes - - Trade & Excise 3,100,000 $1,884,636 Gross Receipts 280,000,000 $258,600,163 Inheritance Tax 3,600 - FSC Franchise - - Corporate Franchise 3,400,000 $1,511,233 Stamp Tax 13,230,000 $5,332,302 Total Other Taxes 371,433,600 $322,200,759 Other Revenues Malpractice Insurance $4,500 $4,254 Licenses $3,700,000 $3,939,227 Fees & Permits $8,500,000 $5,709,995 Lime Tree (Refinery) $14,000,000 - Lime Tree Terminal Fee $12,000,000 $8,119,136 Franchise Fees - $764,110 U.S. Customer Duties - $3,346,181 All Other $4,100,000 $16,714,618 Miscellaneous Service Charge $1,800,000 $1,249,490 Total Other Revenues $44,104,500 $39,847,011 Total Gross Revenue* $931,638,100 $885,857,412 *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 2020 Legislative Appropriation FY 2020 Preliminary Actuals Income Taxes 451,100,000 455,046,619 Other Taxes 371,433,600 322,200,759 Other Revenues 44,104,500 39,847,011 Transfers In 59,381,911 53,755,583 Transfers Out (81,600,000) (84,402,128) Other Financing Sources 24,500,000 1,198,810 Total Gross Revenues* 931,638,100 885,857,412 Total Net Revenues 868,920,011 787,646,654 *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 4 Budget Revenue Expenditures 59,741,573 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 General Fund Revenue (5) Major Categories Real Property (2010-2020) St. Thomas/St. John FY 2020 vs FY 2019 St. Croix FY 2020 vs FY 2019 45% 41% Real Property FY 2020 Annual Report Office of Management and Budget 5 Budget Revenue Expenditures 455,507,770 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Individual Income (2010-2020) St. Thomas/St. John FY 2020 vs FY 2019 St. Croix FY 2020 vs FY 2019 1% 21% Individual Income FY 2020 Annual Report Office of Management and Budget 6 Budget Revenue Expenditures 76,272,291 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 St. Thomas/St. John FY 2020 vs FY 2019 3% Corporate Income St. Croix FY 2020 vs FY 2019 68% Corporate Income (2010-2020) FY 2020 Annual Report Office of Management and Budget 7 Budget Revenue Expenditures 1,884,634 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Excise Tax Excise Tax (2010-2020) St. Thomas/St. John FY 2020 vs FY 2019 St. Croix FY 2020 vs FY 2019 -79% -94% FY 2020 Annual Report Office of Management and Budget 8 Budget Revenue Expenditures 258,850,163 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Gross Receipts (2010-2020) Gross Receipts St. Thomas/St. John FY 2020 vs FY 2019 St. Croix FY 2020 vs FY 2019 -9% 45% FY 2020 Annual Report Office of Management and Budget 9 Budget Revenue Expenditures 7% 54% 8% 0.2% 31% Real Property Individual Income Corporate Income Excise Gross Receipt Percentage of (5) Major Tax Categories Collections for FY 2020 FY 2020 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 15,805,795 6,521,748 1,190,539 16,371,104 19,265,637 977,518 2nd Quarter 22,171,138 8,580,079 1,596,701 20,031,694 26,901,258 1,386,705 3rd Quarter 18,968,007 7,117,674 1,419,119 16,824,165 23,238,859 1,229,553 4th Quarter 21,382,237 8,094,824 1,689,263 18,937,220 25,973,423 1,412,452 - 5,000,000 10,000,000 15,000,000 20,000,000 25,000,000 30,000,000 Salaries by Quarter 27% 11% 2% 25% 33% 2% % of Salaries for FY 2020 GENERAL GOVERNMENT HEALTH & HUMAN SERVICES TRANSPORT. & FACILITIES PUBLIC SAFETY EDUCATION CULTURE & RECREATION Expenditures Salaries (October 2019- September 2020) FY 2020 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 5,500,007 2,298,104 480,619 4,758,972 8,008,294 420,365 2nd Quarter 9,116,378 3,521,483 703,036 6,975,322 12,242,625 631,650 3rd Quarter 8,167,815 2,996,516 711,614 6,241,395 10,788,904 580,938 4th Quarter 7,964,019 3,138,933 709,628 6,382,693 11,482,623 662,796 - 2,000,000 4,000,000 6,000,000 8,000,000 10,000,000 12,000,000 14,000,000 Fringe by Quarter 27% 11% 2% 21% 37% 2% % of Fringe for FY 2020 GENERAL GOVERNMENT HEALTH & HUMAN SERVICES TRANSPORT. & FACILITIES PUBLIC SAFETY EDUCATION CULTURE & RECREATION Fringe (October 2019- September 2020) FY 2020 Annual Report Office of Management and Budget 12 Budget Revenue Expenditures 51% 24% 9% 4% 12% 0% % of Other Services for 2020 GENERAL GOVERNMENT HEALTH & HUMAN SERVICES TRANSPORT. & FACILITIES PUBLIC SAFETY EDUCATION CULTURE & RECREATION GENERAL GOVERNMENT HEALTH & HUMAN SERVICES TRANSPORT. & FACILITIES PUBLIC SAFETY EDUCATION CULTURE & RECREATION 1st Quarter 70,148,932 17,139,652 8,508,043 3,116,758 13,480,963 92,344 2nd Quarter 26,036,886 22,531,645 7,060,281 4,117,872 9,018,536 226,969 3rd Quarer 21,011,504 18,153,516 7,169,774 2,443,701 8,452,464 41,043 4th Quarter 62,306,081 27,718,623 10,469,628 3,463,391 13,244,045 54,075 - 10,000,000 20,000,000 30,000,000 40,000,000 50,000,000 60,000,000 70,000,000 80,000,000 Other Services by Quarter Other Services (October 2019- September 2020) FY 2020 Annual Report Office of Management and Budget 13 Budget Revenue Expenditures 43% 38% 0% 10% 4% 5% % of Capital Projects for 2020 GENERAL GOVERNMENT HEALTH & HUMAN SERVICES TRANSPORT. & FACILITIES PUBLIC SAFETY EDUCATION CULTURE & RECREATION GENERAL GOVERNMENT HEALTH & HUMAN SERVICES TRANSPORT. & FACILITIES PUBLIC SAFETY EDUCATION CULTURE & RECREATION 1st Quarter 818,451 1,031,303 17,890 30,509 - - 2nd Quarter 207,286 284,289 - - 68,363 38,330 3rd Quarter 405,538 180,169 - 223,328 91,900 151,920 4th Quarter 327,596 64,954 - 165,880 24,691 - - 200,000 400,000 600,000 800,000 1,000,000 1,200,000 Capital Projects by Quarter Capital Projects (October 2019- September 2020) FY 2020 Annual Report Office of Management and Budget 14 Budget Revenue Expenditures -1% 4% 60 % Expenditures FY 2019 vs FY 2020 -8% Salaries decreased by 8% Fringe decreased by 1% Other Services increased by 4% Capital Projects increased by 60%