FISCAL YEAR 2021 2nd QUARTER REVENUE & EXPENDITURE REPORT OFFICE OF MANAGEMENT & BUDGET U.S. VIRGIN ISLANDS 2nd QUARTER REVENUE & EXPENDITURE REPORT FISCAL YEAR 2021 1 UNITED STATES VIRGIN ISLANDS FISCAL YEAR 2021 2nd QUARTER REVENUE & EXPENDITURE REPORT March 31, 2021 2nd QUARTER REVENUE & EXPENDITURE REPORT FISCAL YEAR 2021 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 ....................................................................................................................................... Error! Bookmark not defined. Summary .......................................................................................................................................................................13 2nd QUARTER REVENUE & EXPENDITURE REPORT FISCAL YEAR 2021 3 Content and Purpose This quarterly report contains an overview of the Territory’s actual collection of General Fund revenues and expenditures for the first quarter of FY 2021, as compared to FY 2020. This report will highlight any notable trends. This report will give some initial insights into the impact of the economic consequences imposed by the COVID-19 pandemic. 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 FY2020, the pace of collections for second quarter FY2021 are at a decline. The Territory has seen a decrease in collections for all major revenue categories; except for Trade & Excise. This second 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 2021 4 3,002,402 1,518,261 1,509,298 841,054 - 500,000 1,000,000 1,500,000 2,000,000 2,500,000 3,000,000 3,500,000 FY 2020 FY 2021 Real Property St. Thomas/St. John St. Croix 3,002,402 1,509,298 1,518,261 841,054 - 500,000 1,000,000 1,500,000 2,000,000 2,500,000 3,000,000 3,500,000 St. Thomas/St. John St. Croix Real Property FY 2020 FY 2021 REAL PROPERTY Compared to FY 2020, Real Property Tax collections in second quarter FY 2021 decreased 48%. Collections are down in both districts; STT/STJ saw a decrease of 49% and STX a decrease of 44% when compared to FY 2020. In an effort to bolster collections, Lt. Governor Roach ordered to waive all interest and penalties on real property tax until June 30, 2021 in the 4th quarter of FY 2020, however, we anticipate a continued negative impact on collections over the next two quarters. 2nd QUARTER REVENUE & EXPENDITURE REPORT FISCAL YEAR 2021 5 55,857,707 68,985,336 41,824,029 37,040,283 - 10,000,000 20,000,000 30,000,000 40,000,000 50,000,000 60,000,000 70,000,000 80,000,000 FY 2020 FY 2021 Individual Income St. Thomas/St. John St. Croix 55,857,707 41,824,029 68,985,336 37,040,283 - 10,000,000 20,000,000 30,000,000 40,000,000 50,000,000 60,000,000 70,000,000 80,000,000 St. Thomas/St. John St. Croix Individual Income FY 2020 FY 2021 INDIVIDUAL INCOME Overall, Individual Income collections increased 9% in second quarter FY 2021 compared to second quarter FY 2020. However, the STX districts decreased in collection compared to FY 2020 while the STT/STJ district increased. STT/STJ increased by 24% and STX decreased by 11%. With the continued decrease in unemployment and recovery projects coming online, there is a reasonable expectation that Individual Income collections will continue to experience an increase. 2nd QUARTER REVENUE & EXPENDITURE REPORT FISCAL YEAR 2021 6 4,325,161 4,847,727 6,862,755 1,441,375 - 1,000,000 2,000,000 3,000,000 4,000,000 5,000,000 6,000,000 7,000,000 8,000,000 FY 2020 FY 2021 Corporate Income St. Thomas/St. John St. Croix 4,325,161 6,862,755 4,847,727 1,441,375 - 1,000,000 2,000,000 3,000,000 4,000,000 5,000,000 6,000,000 7,000,000 8,000,000 St. Thomas/St. John St. Croix Corporate Income FY 2020 FY 2021 CORPORATE INCOME The second quarter performance for Corporate Income has decreased by 44% compared to FY 2020. The STT/STJ District saw a 12% increase in second quarter collections in FY 2021 compared to second quarter FY 2020. On the other hand, the St. Croix District experienced a significant decrease of 79%. 2nd QUARTER REVENUE & EXPENDITURE REPORT FISCAL YEAR 2021 7 390,599 1,037,415 (70,565) 109,185 (200,000) - 200,000 400,000 600,000 800,000 1,000,000 1,200,000 FY 2020 FY 2021 Excise Tax St. Thomas/St. John St. Croix 390,599 (70,565) 1,037,415 109,185 (200,000) - 200,000 400,000 600,000 800,000 1,000,000 1,200,000 St. Thomas/St. John St. Croix Excise Tax FY 2020 FY 2021 TRADE AND EXCISE The collection of Trade and Excise Tax resumed towards the end of the second quarter on March 15, 2021. STT/STJ District saw collections increase by 166% and STX District a decrease of 255% compared to FY 2020. First quarter FY 2021 reveals an overall 258% increase compared to FY 2020. 2nd QUARTER REVENUE & EXPENDITURE REPORT FISCAL YEAR 2021 8 43,330,136 39,853,786 26,831,688 19,424,921 - 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 FY 2020 FY 2021 Gross Receipts St. Thomas/St.John St. Croix 43,330,136 26,831,688 39,853,786 19,424,921 - 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 St. Thomas/St.John St. Croix Gross Receipts FY 2020 FY 2021 GROSS RECEIPTS FY 2021 second quarter collections for Gross Receipts Tax (GRT) decreased by 16% as compared to FY 2020. There was a reduction in collections for both districts. The STT/STJ district decreased 8% and STX district by 28%. With the anticipated increase in recovery spending, we expect gross receipt collections to increase over the next quarter or two. 2nd QUARTER REVENUE & EXPENDITURE REPORT FISCAL YEAR 2021 9 GENERAL GOVERNMENT HEALTH & HUMAN SERVICES TRANSPORT. & FACILITIES PUBLIC SAFETY EDUCATION CULTURE & RECREATION 2020 22,171,138 8,580,079 1,596,701 20,031,694 26,901,258 1,386,705 2021 30,382,239 7,259,060 1,507,860 7,565,788 22,308,697 1,267,164 - 5,000,000 10,000,000 15,000,000 20,000,000 25,000,000 30,000,000 35,000,000 Salaries 2020 2021 GENERAL GOVERNMENT HEALTH & HUMAN SERVICES TRANSPORT. & FACILITIES PUBLIC SAFETY EDUCATION CULTURE & RECREATION 1st Quarter 17,933,792 7,857,390 1,402,666 16,692,041 21,107,597 1,160,145 2nd Quarter 30,382,239 7,259,060 1,507,860 7,565,788 22,308,697 1,267,164 - 5,000,000 10,000,000 15,000,000 20,000,000 25,000,000 30,000,000 35,000,000 Salaries 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 function of government decreased by 12.86% for second quarter FY 2021 as compared to first quarter FY 2020. The most significant decrease of 62.23% occurred in Public Safety. Another notable decrease occurred in Education at 17.07%. 2nd QUARTER REVENUE & EXPENDITURE REPORT FISCAL YEAR 2021 10 GENERAL GOVERNMENT HEALTH & HUMAN SERVICES TRANSPORT. & FACILITIES PUBLIC SAFETY EDUCATION CULTURE & RECREATION 2020 9,116,378 3,521,483 703,036 6,975,322 12,242,625 631,650 2021 13,115,944 3,422,558 767,738 3,382,854 12,179,439 688,058 - 2,000,000 4,000,000 6,000,000 8,000,000 10,000,000 12,000,000 14,000,000 Fringe Benefits 2020 2021 GENERAL GOVERNMENT HEALTH & HUMAN SERVICES TRANSPORT. & FACILITIES PUBLIC SAFETY EDUCATION CULTURE & RECREATION 1st Quarter 7,038,998 3,061,859 622,287 5,611,559 9,934,311 558,493 2nd Quarter 13,115,944 3,422,558 767,738 3,382,854 12,179,439 688,058 - 2,000,000 4,000,000 6,000,000 8,000,000 10,000,000 12,000,000 14,000,000 Fringe Benefits FRINGE BENEFITS Fringe Benefits increased by 1.1% in second quarter FY 2021 compared to second quarter FY 2020. The most significant increase was in General Government at 43.87% and Health and Transport & Facilities at 9.20%. Notable decreases were Public Safety at 51.50%, Health & Human Services at 2.81%, and Education at .52%. 2nd QUARTER REVENUE & EXPENDITURE REPORT FISCAL YEAR 2021 11 GENERAL GOVERNMENT HEALTH & HUMAN SERVICES TRANSPORT. & FACILITIES PUBLIC SAFETY EDUCATION CULTURE & RECREATION 2020 26,036,886 22,531,645 7,060,281 4,117,872 9,018,536 226,969 2021 26,119,643 10,425,238 2,090,033 1,623,319 1,962,404 36,905 - 5,000,000 10,000,000 15,000,000 20,000,000 25,000,000 30,000,000 Other Services 2020 2021 GENERAL GOVERNMENT HEALTH & HUMAN SERVICES TRANSPORT. & FACILITIES PUBLIC SAFETY EDUCATION CULTURE & RECREATION 1st Quarter 19,269,983 9,441,496 2,041,165 2,417,896 1,706,170 18,809 2nd Quarter 26,119,643 10,425,238 2,090,033 1,623,319 1,962,404 36,905 - 5,000,000 10,000,000 15,000,000 20,000,000 25,000,000 30,000,000 Other Services OTHER SERVICES Other Services saw an overall decrease of 38.75% in second quarter FY 2021 compared to the same quarter in FY 2020. Notable decreases were in Culture & Recreation at 83.74%, Education at 78.24%, Transport and Facilities at 70.40%, Health & Human Services at 53.73% and Public Safety at 60.58%. 2nd QUARTER REVENUE & EXPENDITURE REPORT FISCAL YEAR 2021 12 GENERAL GOVERNMENT HEALTH & HUMAN SERVICES TRANSPORT. & FACILITIES PUBLIC SAFETY EDUCATION CULTURE & RECREATION 2020 207,286 284,289 - - 68,363 38,330 2021 6,704,332 23,000 - 52,500 213,950 - - 1,000,000 2,000,000 3,000,000 4,000,000 5,000,000 6,000,000 7,000,000 8,000,000 Capital Projects 2020 2021 GENERAL GOVERNMENT HEALTH & HUMAN SERVICES TRANSPORT. & FACILITIES PUBLIC SAFETY EDUCATION CULTURE & RECREATION 1st Quarter 221,158 182,656 687,534 127,896 - 167,100 2nd Quarter 6,704,332 23,000 - 52,500 213,950 - - 1,000,000 2,000,000 3,000,000 4,000,000 5,000,000 6,000,000 7,000,000 8,000,000 Capital Projects CAPITAL PROJECTS Capital projects increased 1069% in first quarter FY 2021 as compared to FY 2020. The most notable increase was seen in Public Safety at 100%, General Government at 96.1%, and Education at 68.05%. The most substantial decrease occurred with Health & Human Services by 1136.04%. 2nd QUARTER REVENUE & EXPENDITURE REPORT FISCAL YEAR 2021 13 SUMMARY In summary, the Territory saw an overall decrease of 7% in Total Operating Income. Specifically, Total Taxes decreased by 9% while Total Other Revenues increased by 41%. Overall, this represented a 9% reduction in Total Revenue collections for second quarter FY 2021 when compared to FY 2020. The most notable decrease was seen in Real Property at 76%, Fines, Forfeits & Permits at 47%, and Gross Receipts at 15%. By contrast the most notable increases are Miscellaneous Revenues at 468%, Excise Tax at 107%, Malpractice Insurance at 77%, and Concession Fee (Lime Tree) at 75%. The Total Revenues as of March FY 2021 was $370.2M compared to $407.1M for FY2020. From a cash flow perspective, at the end of the Second quarter FY 2021, specifically the week ended April 2, 2021, the Territory had a positive cash flow of $25.8 million and a positive cash balance of $58.3 million with 22 days cash on hand.