After weeks of government department reports on budget cuts, the Legislature's Finance Committee heard testimony Thursday from the private sector representatives on how to enhance revenues.
John P. de Jongh, chairman of the governor's Fiscal Recovery Task Force, and economist Richard Moore spent the early session of the Finance Committee hearing reiterating the same things that they and others have said over and over: decrease the government payroll, grow the private sector and stop deficit spending.
Moore pointed out that tourism accounts for the majority of jobs in the territory. In 1998, he said, tourism generated 50 percent of the tax revenues coming out of the private sector.
But Moore said the combination of storms and competition from other destinations "has caused the V.I. economy to operate well below its long-run potential growth path.
"Employment, income and capital investment have fallen to rates and levels last observed in the mid-1980s," Moore said.
DeJongh repeated what he told a League of Women Voters luncheon on Monday: The deficit will reach $440 million by 2003.
But de Jongh added this "presumes that vendors, employees and investors will continue to do business with the government."
The five-year plan being developed by de Jongh and a group of about 30 others from all segments of the community is not meant to be a "shelf document," he said.
The plan is intended to be an initiative-driven document based on governmental operations and private-sector actions, which is subject to annual review and to frame the budget — complete with a monitoring process.
He said the plan will be useful to the government by:
— Addressing governmental operations and service delivery to the community, which will also lead to addressing the financial structure.
— Stimulating private-sector development and initiative required to increase business activity and job creation.
— Establishing a process to ensure implementation and compliance with the initiatives to be noted in the final document.
Implementation has been the theme of much of de Jongh's discussion of the plan. Without assurance that the plan will be adhered to, it won't work, he has said repeatedly.
Moore said every year 1,200 students graduate from high school in the Virgin Islands and two-thirds of them have to seek employment elsewhere. "Children have been and are likely to remain the territory's most valuable export."
Moore estimated the losses over the last 10 years of economic downturn has cost the territory at least $2.2 billion.
In general the economic crisis can be attributed to shrinkage of the private-sector tax base, reduced profitability across all business enterprise and uncontrolled growth in public spending, he said.
Moore believes, as does deJongh, that the crisis can only be solved through private-sector growth.
Both of the testifiers said it's unlikely that the federal government will step in and establish a control board.
Moore said, "Only under a scenario of complete and utter chaos is it probable that federal authorities will take up residence in the Virgin Islands to administer control of the public sector."
De Jongh told the Finance Committee that at some point solutions have to be formulated that will move the V.I. from its static position.
"For this to happen we need and require consensus, which mandates that we have responsible leadership."
