FISCAL YEAR 2023 2nd QUARTER REVENUE & EXPENDITURE REPORT OFFICE OF MANAGEMENT & BUDGET U.S. VIRGIN ISLANDS 2nd QUARTER REVENUE & EXPENDITURE REPORT FISCAL YEAR 2023 1 UNITED STATES VIRGIN ISLANDS FISCAL YEAR 2023 2nd QUARTER REVENUE & EXPENDITURE REPORT March 31, 2023 2nd QUARTER REVENUE & EXPENDITURE REPORT FISCAL YEAR 2023 2 Table of Contents Real Property ..................................................................................................................................................................4 Individual Income ...........................................................................................................................................................5 Corporate Income ...........................................................................................................................................................6 Trade and Excise .............................................................................................................................................................7 Gross Receipts .................................................................................................................................................................8 Expenditures ...................................................................................................................................................................9 Salaries ............................................................................................................................................................................9 Fringe Benefits ..............................................................................................................................................................10 Other Services ...............................................................................................................................................................11 Capital Projects .............................................................................................................................................................12 Summary .......................................................................................................................................................................13 2nd QUARTER REVENUE & EXPENDITURE REPORT FISCAL YEAR 2023 3 Content and Purpose This quarterly report contains an overview of the Territory’s actual collection of General Fund revenues and expenditures for the second quarter of FY 2023, as compared to FY 2022. This report will highlight any notable trends. The purpose of this quarterly 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, these reports lend 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. These reports provide taxpayers with the information they need to hold the government to this standard. In comparison to FY2022, the pace of collections for second quarter FY2023 are at an incline. The Territory has seen an increase in collections for all major revenue categories; except for Individual Income. This first quarter 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. Timeframe and Limitations The information provided in this report are 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. Summary of major revenue categories of General Fund 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. 2nd QUARTER REVENUE & EXPENDITURE REPORT FISCAL YEAR 2023 4 REAL PROPERTY Compared to FY 2022, Real Property Tax collections in second quarter FY 2023 increased 45%. Collections are up in both districts STT/STJ saw a decrease of 73% and STX saw an increase of 10% when compared to FY 2022 1,013,982 1,750,877 792,931 874,079 - 200,000 400,000 600,000 800,000 1,000,000 1,200,000 1,400,000 1,600,000 1,800,000 2,000,000 FY 2022 FY 2023 Real Property St. Thomas/St. John St. Croix 1,013,982 792,931 1,750,877 874,079 - 200,000 400,000 600,000 800,000 1,000,000 1,200,000 1,400,000 1,600,000 1,800,000 2,000,000 St. Thomas/St. John St. Croix Real Property FY 2022 FY 2023 2nd QUARTER REVENUE & EXPENDITURE REPORT FISCAL YEAR 2023 5 INDIVIDUAL INCOME Overall, Individual Income collections increased by 3% in second quarter FY 2023 compared to second quarter FY 2022. District One, STT/STJ, saw an decrease of 1%, while STX collections decreased by 12%. 59,973,390 59,165,273 24,536,941 27,461,988 - 10,000,000 20,000,000 30,000,000 40,000,000 50,000,000 60,000,000 70,000,000 FY 2022 FY 2023 Individual Income St. Thomas/St. John St. Croix 59,973,390 24,536,941 59,165,273 27,461,988 - 10,000,000 20,000,000 30,000,000 40,000,000 50,000,000 60,000,000 70,000,000 St. Thomas/St. John St. Croix Individual Income FY 2022 FY 2023 2nd QUARTER REVENUE & EXPENDITURE REPORT FISCAL YEAR 2023 6 CORPORATE INCOME The second quarter performance for Corporate Income has increased by 123% compared to FY 2022, due to the timing of receiving early payments in March as opposed to the receipt of payments historically received in April. The STT/STJ District saw a 144% increase and the STX district saw a 40% decrease in second quarter collections in FY 2023 compared to second quarter FY 2022. 12,953,686 31,602,392 1,708,422 1,030,252 - 5,000,000 10,000,000 15,000,000 20,000,000 25,000,000 30,000,000 35,000,000 FY 2022 FY 2023 Corporate Income St. Thomas/St. John St. Croix 12,953,686 1,708,422 31,602,392 1,030,252 - 5,000,000 10,000,000 15,000,000 20,000,000 25,000,000 30,000,000 35,000,000 St. Thomas/St. John St. Croix Corporate Income FY 2022 FY 2023 2nd QUARTER REVENUE & EXPENDITURE REPORT FISCAL YEAR 2023 7 TRADE AND EXCISE The collection of Trade and Excise Tax end of the second quarter on March 31, 2023. Overall, the Territory saw a 47% increase in the second quarter of FY 2023 compared to FY 2022. STT/STJ District saw collections increase by 56% and STX District a decrease 5% compared to FY 2022 5,773,331 8,991,688 1,014,841 961,536 - 1,000,000 2,000,000 3,000,000 4,000,000 5,000,000 6,000,000 7,000,000 8,000,000 9,000,000 10,000,000 FY 2022 FY 2023 Excise Tax St. Thomas/St. John St. Croix 5,773,331 1,014,841 8,991,688 961,536 - 1,000,000 2,000,000 3,000,000 4,000,000 5,000,000 6,000,000 7,000,000 8,000,000 9,000,000 10,000,000 St. Thomas/St. John St. Croix Excise Tax FY 2022 FY 2023 2nd QUARTER REVENUE & EXPENDITURE REPORT FISCAL YEAR 2023 8 GROSS RECEIPTS FY 2023 second quarter collections for Gross Receipts Tax (GRT) increased by 1% as compared to FY 2022. The STT/STJ District increased by 4% and STX decreased by 6%. Collections in the current fiscal year are expected to increase for the remaining months as tourism will continue to increase and the impact of federal aid boosts investment spending will increase. 39,875,863 41,463,457 15,613,662 14,647,909 - 5,000,000 10,000,000 15,000,000 20,000,000 25,000,000 30,000,000 35,000,000 40,000,000 45,000,000 FY 2022 FY 2023 Gross Receipts St. Thomas/St.John St. Croix 39,875,863 15,613,662 41,463,457 14,647,909 - 5,000,000 10,000,000 15,000,000 20,000,000 25,000,000 30,000,000 35,000,000 40,000,000 45,000,000 St. Thomas/St.John St. Croix Gross Receipts FY 2022 FY 2023 2nd QUARTER REVENUE & EXPENDITURE REPORT FISCAL YEAR 2023 9 EXPENDITURES As with previous iterations of this report, the expenditures presented in this report reflect amounts appropriated for General Fund. This report examines the Lapsing portion of the General Fund. In subsequent reports, efforts will be made to include the Non-Lapsing element of the General Fund. The expenditures are analyzed by budget category based on the applicable function of government. While inferences can be made regarding the trajectory of expenditures based on the data presented, expenditures are cyclical and therefore fluctuate. Also, while salaries are a bit more predictable and therefore more suitable to determine effects, caution is still advised given the preliminary nature of the data. SALARIES Actual salaries across all functions of government decreased by 28% for first quarter FY 2023 as compared to first quarter FY 2022. Notable decreases occurred in General Government of 24% and increases are found in Transportation & Facilities and Education of 14%. GENERAL GOVERNMENT HEALTH & HUMAN SERVICES TRANSPORT. & FACILITIES PUBLIC SAFETY EDUCATION CULTURE & RECREATION 2022 47,070,261 4,745,235 2,441,965 17,866,217 32,716,117 1,503,865 2023 33,326,331 2,557,987 1,631,585 12,124,990 25,365,587 1,047,746 - 5,000,000 10,000,000 15,000,000 20,000,000 25,000,000 30,000,000 35,000,000 40,000,000 45,000,000 50,000,000 Salaries 2022 2023 GENERAL GOVERNMENT HEALTH & HUMAN SERVICES TRANSPORT. & FACILITIES PUBLIC SAFETY EDUCATION CULTURE & RECREATION 1st Quarter 43,996,345 2,351,246 1,471,310 11,362,393 22,204,433 975,595 2nd Quarter 33,326,331 2,557,987 1,631,585 12,124,990 25,365,587 1,047,746 3rd Quarter - - - - - - 4th Quarter - - - - - - - 5,000,000 10,000,000 15,000,000 20,000,000 25,000,000 30,000,000 35,000,000 40,000,000 45,000,000 50,000,000 Salaries 2nd QUARTER REVENUE & EXPENDITURE REPORT FISCAL YEAR 2023 10 FRINGE BENEFITS Fringe Benefits increases by 36% in first quarter FY 2023 compared to second quarter FY 2022. All categories increased over FY 2022. GENERAL GOVERNMENT HEALTH & HUMAN SERVICES TRANSPORT. & FACILITIES PUBLIC SAFETY EDUCATION CULTURE & RECREATION 2022 19,240,610 2,038,755 1,153,385 5,169,385 16,401,218 861,519 2023 18,145,865 1,307,083 942,867 4,064,258 13,078,361 670,452 - 5,000,000 10,000,000 15,000,000 20,000,000 25,000,000 Fringe 2022 2023 GENERAL GOVERNMENT HEALTH & HUMAN SERVICES TRANSPORT. & FACILITIES PUBLIC SAFETY EDUCATION CULTURE & RECREATION 1st Quarter 11,629,976 951,965 645,759 2,659,240 9,456,946 502,833 2nd Quarter 18,145,865 1,307,083 942,867 4,064,258 13,078,361 670,452 3rd Quarter - - - - - - 4th Quarter - - - - - - - 2,000,000 4,000,000 6,000,000 8,000,000 10,000,000 12,000,000 14,000,000 16,000,000 18,000,000 20,000,000 Fringe Benefits 2nd QUARTER REVENUE & EXPENDITURE REPORT FISCAL YEAR 2023 11 OTHER SERVICES Other Services saw an overall decrease of 16% in first quarter FY 2023 compared to the same quarter in FY 2022. Notable increases were in Education of 97% with notable decreases in Culture & Recreation of 17%. GENERAL GOVERNMENT HEALTH & HUMAN SERVICES TRANSPORT. & FACILITIES PUBLIC SAFETY EDUCATION CULTURE & RECREATION 2022 32,837,620 2,617,511 2,422,978 1,771,664 3,557,368 212,374 2023 22,310,314 3,398,400 2,776,012 1,318,223 6,628,501 77,312 - 5,000,000 10,000,000 15,000,000 20,000,000 25,000,000 30,000,000 35,000,000 Other Services 2022 2023 GENERAL GOVERNMENT HEALTH & HUMAN SERVICES TRANSPORT. & FACILITIES PUBLIC SAFETY EDUCATION CULTURE & RECREATION 1st Quarter 22,095,948 2,623,160 2,339,178 1,322,905 3,352,360 93,552 2nd Quarter 22,310,314 3,398,400 2,776,012 1,318,223 6,628,501 77,312 3rd Quarer - - - - - - 4th Quarter - - - - - - - 5,000,000 10,000,000 15,000,000 20,000,000 25,000,000 Other Services 2nd QUARTER REVENUE & EXPENDITURE REPORT FISCAL YEAR 2023 12 CAPITAL PROJECTS Capital projects decreased 34% in the second quarter of FY 2023 as compared to FY 2022. The notable decrease was found in Health & Human Services of 69%. Notable increases occurred with Transportation & Facilities. GENERAL GOVERNMENT HEALTH & HUMAN SERVICES TRANSPORT. & FACILITIES PUBLIC SAFETY EDUCATION CULTURE & RECREATION 1st Quarter 1,469,034 - 300,675 111,147 28,448 18,800 2nd Quarter 935,267 9,895 252,571 - - 247,704 3rd Quarter - - - - - - 4th Quarter - - - - - - - 200,000 400,000 600,000 800,000 1,000,000 1,200,000 1,400,000 1,600,000 Capital Projects 2nd QUARTER REVENUE & EXPENDITURE REPORT FISCAL YEAR 2023 13 SUMMARY In summary, the Territory’s Total Operating Income FYD 2023 (March 31, 2023) increased by 6% compared FYD 2022 (March 31, 2022). Specifically, increases occurred in Individual Income, 12%, Corporate Income, 22%, and Excise Tax by 43%, while deceases occurred in Property Tax, 27%, and Gross Receipts, 5%. Total Other Revenues decreased by 19%. Overall, this represented a 2% increase in Total Revenue collections for FYD 2023 when compared to FYD 2022. The Total Revenues as of March for FY 2023 is $378 million compared to $357 million for FY2022. From a cash flow perspective, at the end of the second quarter FY 2023, specifically the week ending on March 31, 2023, the Territory had a positive cash flow of $17.3 million and a positive cash balance of $ 30.5 million with 11 days cash on hand.