Financial Team Pares Back Final FY ’23 Budget as Revenue Projections Dip

With an anticipated decrease in General Fund revenue projections of approximately $18 million, members of the governor’s financial team presented a pared-back Fiscal Year ’23 budget Wednesday, opting to cut back in other categories to offer flexibility while they wait to see how other funding streams – including anticipated rum cover-over dollars – play out.

At the beginning of the summer, the financial team proposed a total appropriated and non-appropriated budget of $1.4 billion for FY ’23, including $963 million from the General Fund, $210.1 million in other appropriated funds, and $253.9 million in non-disaster-related federal funds. Meeting with the Senate’s Finance Committee Wednesday for the final budget hearing before the start of mark-up, however, Office of Management and Budget Director Jenifer O’Neal said the total overall recommended had been scaled back to $1.37 million, inclusive of a decreased $945 million in General Funds, along with $119.8 million in other appropriated funds and $58 million in other non-appropriated funds.

In her testimony, O’Neal offered a range of factors, including the closure of the Limetree Bay refinery, which she said consequently led to an 11-12 percent decline in monthly income tax collections as employees were “terminated” and the payment in lieu of taxes from the refinery to the government lost. In fact, the final $945 million in projections also factors in $18 million in American Recovery Plan Act (ARPA) funds that were used to offset the deficit, though increases in excise tax and corporate franchise taxes have shielded the territory from a larger blow, O’Neal said.