According to the latest Cayman Islands Government Pre-Election Economic and Financial Update there will be a $31M shortfall in its projected operating surplus in the current 2012/13 budget.

Originally budgeted as a surplus of $82.3M, the surplus has plummeted to $51.1M.

The reasons listed in the Update are all due to unexpected delays in anticipated revenues.

Delays in construction of the Special Economic Zone $11.3M less

Delays affecting the implementation of the Special Economic Zone grant fee $2.6M less

Delays in amounts received from revised tourism departure tax due to  “timing and other issues” $2.2M less

Delays in implementation of fee work permit fee increases $5.1M less

Delays in implementation of new fees on motor vehicles due to “timing” $2.6 M less

The non-implementation of various fund directors fees, compliance fees for all other financial directors, fees for licensed security investment businesses, fees for directors of regulated entities and master fund registration fees, amongst others $33M.

The following actually came in higher than expected:

$2.5 million increase for the grants of term limit exemption permits

$13 million (approx.) increase in stamp duty, land transfers and share transfers from land-holding companies mainly due to a few larger property transfers

$2.4 million increase from annual permanent residency fees.

Debt reductions will not meet the United Kingdom’s (UK) budget goals through the 2015/16 government budget year.  Government’s costs to pay off yearly debt should be no more than 10 per cent of central government revenues.

Core government debt is forecast to be at $575.4M by 30 June

Public sector debt is forecast to be $717.9M by 30 June.

Other financial requirements within the Public Management and Finance Law is forecast now to be met in either 2013/14 or 2014/15.

*Government cash reserve requirements won’t be reached until mid-2015.

*Note: – Government cash reserves must have at least 90 days of executive expenses in the bank

Operating surpluses for each of the next three budget years are below initial goals set forth by the UK’s Foreign and Commonwealth Office (FCO).

Government operating expenses are approx. $25.7M above the goals set 
by the UK over the next two budget years.