Sept. 23, 2003 – In the continuing saga of the Fiscal Year 2004 budget, the administration's top fiscal officers did battle with members of the Legislature once again on Tuesday in the Senate Finance Committee's budget overview hearing.
Ira Mills, director of the Office of Management and Budget, did not deliver any particularly good news as he gave a rundown of expected fiscal challenges, revenue projections and expenditure plans. Nor did he have any particular surprises. The same budget issues have been tossed back and forth between the executive and legislative branches of government for several months: The government is broke, and there is a little agreement on how best to fix it.
The proposed FY 2004 budget unveiled by Gov. Charles W. Turnbull on Aug. 29, three months after the legal deadline, has found no vocal supporters outside of his cabinet. On St. Croix recently, members of the American Federation of Teachers and Our Virgin Islands Labor Union converged on the Legislature Building for what was billed as a show of solidarity by government workers in opposition to the governor's plans to increase taxes and reduce the public work week.
Sen. Celestino A. White Sr., majority leader in the last Legislature and a minority member in the current one, had said earlier that the governor's budget showed "inadequate planning and lack of common sense" and that it should be "sent back to the governor stamped Rejected." He elaborated on that view on Tuesday.
The governor is calling for several tax measures which the Finance Committee rejected last summer as part of his fiscal recovery package. The fiscal officers again on Tuesday repeated what they have said before: "If you don't agree with the governor's proposals, submit some of your own." Those were the words of Nathan Simmonds, director of the governor's Office of Fiscal and Economic Recovery Implementation. He said the members of the administration fiscal team have "agonized for weeks trying to come up with ways to balance the budget."
Turnbull's tax proposals were not embraced by any of the senators on Tuesday, but his proposed 36-hour work week came in for the most abuse, consuming a large chunk of the daylong meeting.
Mills tried his best to defend the measure, saying the reduced work week would "forge a new level of efficiency."
"Do you think that is an incentive to work more?" Sen. Louis Hill asked.
Mills replied that in European countries, "you will see that they have increased production with fewer hours."
A way of making it with less money
He said the shorter work week would force people to do in 36 hours what formerly had been done in 40 and that it would leave people more free time. In response to senators' questions about how people are supposed to live with less money, Mills replied: "The stores will know, and they will charge less."
The remark was greeted with laughter but also with scorn. Sen. Adlah "Foncie" Donastorg, the Finance Committee chair, answered back: "You are talking, but are you listening to what you are saying?"
Hill said that "there are government employees making $15,000 and $16,000. We are going to drive people into poverty and homelessness while we continue to make $80,000 and $70,000, drive around in government vehicles, purchase gas and enjoy all the other perks, and our people suffer. I think it is unfair."
Later in the meeting, White said he actually had telephoned some stores "to ask about lowering prices." And the response? "Plaza Extra said, 'You think with what's going on now, we'll lower prices'? I spoke to the cable company, and they said, 'Get rid of the extras.' Less money doesn't translate to any business lowering prices."
Pronouncing the idea of stores lowering prices "stupid thinking and voodoo economics," he added: "When you go to the shops, just say 'Mills sent me.'"
Mills said the proposed work-week cut is across the board, including exempt executive staff. "We will work our regular 40 or more hours," he said, "but we will be paid for only 36." The effect, he said, would be another 10 percent cut for those in the highest income brackets on top of the already imposed 10 percent cut the governor announced earlier this year.
Donastorg said the work reduction would pose "serious social problems" as well as give the public the impression of a "level of insensitivity."
"That is unfair criticism," Simmonds countered. "However, we are open to your suggestions if you have a less painful way to balance the budget," he said.
"Lead by example," Donastorg replied.
Mills said each department and agency would have to determine its needs within the reduced work week — and that Education Department and essential services personnel "may have to stagger hours."
A minority budget in the making
Sen. Carlton Dowe and several other minority bloc senators said they will be submitting a plan of their own shortly. Dowe noted that many of the cost-cutting and revenue-enhancing suggestions the minority submitted to Government House several months ago have been implemented, including a new tire tax and an increase in the road tax.
The minority plan, Dowe said, does not include a 36-hour work week, an increase in the gross receipts tax, or a personal income tax surcharge. One tax Dowe said he will push for is a $2.50-per-person tax on cruise ship passengers. The highly disputed "head tax" died in its last Senate outing several years ago in the face of vehement objections by the cruise ship industry.
Dowe said that Caricom, the common market umbrella of most of the Eastern Caribbean nations, "has announced they will now charge $20 per passenger." So, he said, "ours needs to be more than $2.50."
Sen. Luther Renee called remarks that Mills had made in his opening statement "learned helplessness." Mills had said that the territory's economy was "linked to the sluggish recovery of the U.S. economy, lingering concerns about air travel, as well as the hostilities in Iraq and the protracted oil-sector strike in Venezuela."
Renee retorted: "We are at their mercy if we don't address our own problems. We can't change what we don't acknowledge." And, he added, "Reducing the work week further depresses consumer spending."
Renee and several other St. Croix senators asked why capital projects slated for St. Croix have not yet begun. "They are not being fast-forwarded," he said.
Mills reminded him that much of the recently authorized $235 million bond issue is earmarked for capital projects. "We have done all we could have done — we are creating St. Croix capital projects," he said. "The private sector fuels the public," Mills added.
"I'm so glad you said that," Renee replied.
Questions came up about the pending bond issue. Donastorg announced that he had invited Kenneth Mapp, Public Finance Authority director of finance and administration, to appear before the committee on Wednesday to explain the PFA's role in the fiscal year ahead and to provide an update on the bonds.
As the meeting was drawing to a close around 7:30 p.m. Donastorg said he had received a reply from Mapp and that he would not be able to attend Wednesday's meeting because he was beginning a "long-needed vacation" and would be out of the territory. Donastorg then canceled Wednesday's continuation of the overview hearing, saying that it appeared to be unnecessary since Mapp couldn't be there.
Donastorg asked Finance Commissioner Bernice Turnbull to provide the committee a list of current balances on various government funds. He said he would need the information by Thursday, when the committee is to begin its markup of the
budget. Turnbull said she would comply to the extent that the figures are available.
Committee members at the hearing were Sens. Donastorg, Hill, Norman Jn Baptiste, Renee and Russell. Sens. Roosevelt David and Shawn-Michael Malone were excused. Also present were Sens. Lorraine Berry, Douglas Canton, Dowe, Almando "Rocky" Liburd and Usie Richards, who are not members of the committee.
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