to spend its tax revenue for the next year.

Finance Minister Eugene Cox will stand before the Legislature and undoubtedly deliver a mixture of honey and lemon. In any budget, in any year, in any country, there are winners and losers.

What then might Bermuda expect to hear Mr. Cox read out today? Last year, the Government set out to spend just under $529 million. That budget represented an increase of $17.6 million over 1999. Percentage wise it was a small increase of under four percent.

This year Bermuda should expect to see projected spending increase again, and in terms of percentage change, that increase may well be higher than last year.

One reason to expect this would be that many of the Government's costly projects are still ongoing -- the New Berkeley Institute, the introduction of fast ferries, the National Sports Centre and upgrading the public docks to name a few.

Another is the speedy passage of the Hotel Concession Act last autumn. The Act won cheers from the industry -- especially after hotels were disappointed at not winning concessions in last year's budget. It allows for rebates or tax deferments for hotels on land tax, hotel occupancy, payroll taxes and up to 70 percent relief on alcohol duty.

While the hope is the concessions will lead to a long-term revitalisation of the industry, the Island is expected to feel the bite in terms of tax revenues lost or held off for at least five years. The tab on this one is about to come home for Government.

The October Throne Speech also gave some clues as to which areas Government intends to focus its resources on in the next financial year.

State of the art new courts, a Financial Assistance bill, beefing up Family Services to allow for home-based programmes, improving and extending the Railway Trail, getting the Drugs Court off the ground, establishing a Bermuda Biodiversity Project and a pilot project for implementing electronic tax filing will all require new or redirected spending.

Prior to last year's budget, the Finance Ministry asked all departments to find ways to trim the fat. The alternative was to have it trimmed for them.

In doing so many lost programmes or services. For example, Airport Services was asked to do without $569,000 that it had the year before. To do so the airport now shuts down at night and only re-opens for serious emergency landings. Customs cut $437,000 by not filling vacated posts.

But can departments be expected to cut again this year? Is there more fat to be chopped away? To meet committed and projected spending Mr. Cox must arrive this morning with good news about Government revenues.

We already know that tourism revenue will be down as a result of declining arrivals and new concessions. But one hopeful sign on the horizon is the buzz that new business incorporations in Bermuda were very high last year. The fees associated with these incorporations will help boost Government coffers.

And Shadow Finance Minister Grant Gibbons has recently suggested that tax revenue which resulted from last year's changes to payroll taxes were more significant than Government expected.

Does Mr. Cox have more money to work with then? Let's hope so because then the Island may meet its spending objectives without having to increase borrowing or raise taxes.

Last year, Government did both but with an expected shrinking American economy, to do so again this year may simply be too risky in an increasingly interdependent global economy.

Despite increased borrowing last year and an elevation of the legislated debt ceiling, total borrowing did not exceed the ten percent of GDP considered fiscally prudent.

Hopefully today's budget will be equally prudent.