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HomeNewsArchivesWOULD YOU BELIEVE, NO FINANCIAL CRISIS PENDING?

WOULD YOU BELIEVE, NO FINANCIAL CRISIS PENDING?

The government, with checks being cut and mailed Thursday, is up to date on paying all bills that have been submitted to the Finance Department, and there should be no financial crises through Sept. 30, the end of the fiscal year. At least that's what Turnbull administration officials and consultants told the Senate Finance Committee Wednesday.
Rudolph Krigger, Gov. Charles Turnbull's assistant for fiscal policy and economic affairs, said in a written statement he submitted to the committee that the administration's current projection of General Fund revenues for this fiscal year is $394.7 million. This plus a small part of the $300 million realized in the government's recent bond issue will allow the government to meet its targeted spending of $432 million through Sept. 30, he said.
Finance chair Lorraine Berry had called the committee meeting for April 13, asking that Government House report to the Senate on the government's current financial status. At the administration's request, she rescheduled the meeting for Wednesday.
At the end of the daylong meeting, Berry expressed skepticism about the figures bandied about in the testimony and reports presented. "It looks like we are ending the day the way we started it," she said. "At the end of May, when the [fiscal year 2001] budget comes down, then we will know the real picture."
In preparation for the session, Berry had sent an 11-page questionnaire to 12 top Turnbull financial and legal officers, asking them to appear before the committee.
Margaret Guarino, director of First Union Capital, one of the governor's mainland financial consultants, told the committee Wednesday that "based on projected revenues and expenses, we will not have a problem through September." She added that there might be a "small $2.5 million shortfall," but "that can be managed."
Berry asked how the fiscal balancing act would be accomplished. "Through a 10 percent payroll cost reduction and revenue enhancements," Guarino replied. The consultant said that revenues coming in and the $300 million generated by the bond issue would "build a bridge" for cost reductions and enhancements to take effect.
In his lengthy statement in response to the questionnaire, Krigger agreed with Guarino's tentative $2.5 million projected shortfall, but he said the administration has undertaken "several significant initiatives to help alleviate the cash flow shortfall."
Additional revenue, he said, will result from an increase approved by Congress in the amount of federal excise tax on bulk rum sales on the mainland that is rebated to the territory — a hike to $13.25 from $10.50 per proof gallon. He said this increase will represent more than $20 million in additional revenues through fiscal year 2001.
And, Krigger said, the Federal Emergency Management Agency has granted the government a deferral on making payments on the territory's hundreds of millions of dollars in community disaster loans from Hurricanes Hugo and Marilyn for the next two quarters — that is, through the end of this fiscal year. He said this deferral represents an $8 million revenue "source."
Finally, he said that the collection of delinquent taxes is estimated at $12 million.
According to Krigger, the total revenue "initiatives," including the foregoing, are estimated to save the government $39 million between now and Sept. 30.
The government plans to cut expenses mainly by reducing the payroll, Krigger said. He said cutbacks are projected to save $15.6 million — in fiscal year 2001. For the current fiscal year, he said, payroll costs are down 10 percent from fiscal year 1999.
As of April 6, Krigger told the senators, revenue from the $300 bond issue had been expended as follows:
Vendor payments — nearly $46.4 million
Tax refunds — over $87.5 million
Working capital — nearly $38.9 million
Repayment of balance owed on local bank 1999 payroll loan — more than $20.9 million
This would add up to nearly $193.7 million. However, Krigger in his written statement cited a balance of about $75.3 million, all of it earmarked for expenditure: nearly $46.5 million for more tax refunds, over $13.8 million for operating expenses and $15 million for a retirement incentive plan.
No new retirement incentive plan is in place. During the committee hearing, Sens. Donald "Ducks" Cole and Almando "Rocky" Liburd confronted Office of Management and Budget director Ira Mills about their retirement bill that the Government Employees Retirement System Board rejected earlier this year. Nothing was resolved in a heated discussion of the measure.
Mills was to provide Berry a further breakdown of funds.

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The government, with checks being cut and mailed Thursday, is up to date on paying all bills that have been submitted to the Finance Department, and there should be no financial crises through Sept. 30, the end of the fiscal year. At least that's what Turnbull administration officials and consultants told the Senate Finance Committee Wednesday.
Rudolph Krigger, Gov. Charles Turnbull's assistant for fiscal policy and economic affairs, said in a written statement he submitted to the committee that the administration's current projection of General Fund revenues for this fiscal year is $394.7 million. This plus a small part of the $300 million realized in the government's recent bond issue will allow the government to meet its targeted spending of $432 million through Sept. 30, he said.
Finance chair Lorraine Berry had called the committee meeting for April 13, asking that Government House report to the Senate on the government's current financial status. At the administration's request, she rescheduled the meeting for Wednesday.
At the end of the daylong meeting, Berry expressed skepticism about the figures bandied about in the testimony and reports presented. "It looks like we are ending the day the way we started it," she said. "At the end of May, when the [fiscal year 2001] budget comes down, then we will know the real picture."
In preparation for the session, Berry had sent an 11-page questionnaire to 12 top Turnbull financial and legal officers, asking them to appear before the committee.
Margaret Guarino, director of First Union Capital, one of the governor's mainland financial consultants, told the committee Wednesday that "based on projected revenues and expenses, we will not have a problem through September." She added that there might be a "small $2.5 million shortfall," but "that can be managed."
Berry asked how the fiscal balancing act would be accomplished. "Through a 10 percent payroll cost reduction and revenue enhancements," Guarino replied. The consultant said that revenues coming in and the $300 million generated by the bond issue would "build a bridge" for cost reductions and enhancements to take effect.
In his lengthy statement in response to the questionnaire, Krigger agreed with Guarino's tentative $2.5 million projected shortfall, but he said the administration has undertaken "several significant initiatives to help alleviate the cash flow shortfall."
Additional revenue, he said, will result from an increase approved by Congress in the amount of federal excise tax on bulk rum sales on the mainland that is rebated to the territory -- a hike to $13.25 from $10.50 per proof gallon. He said this increase will represent more than $20 million in additional revenues through fiscal year 2001.
And, Krigger said, the Federal Emergency Management Agency has granted the government a deferral on making payments on the territory's hundreds of millions of dollars in community disaster loans from Hurricanes Hugo and Marilyn for the next two quarters -- that is, through the end of this fiscal year. He said this deferral represents an $8 million revenue "source."
Finally, he said that the collection of delinquent taxes is estimated at $12 million.
According to Krigger, the total revenue "initiatives," including the foregoing, are estimated to save the government $39 million between now and Sept. 30.
The government plans to cut expenses mainly by reducing the payroll, Krigger said. He said cutbacks are projected to save $15.6 million -- in fiscal year 2001. For the current fiscal year, he said, payroll costs are down 10 percent from fiscal year 1999.
As of April 6, Krigger told the senators, revenue from the $300 bond issue had been expended as follows:
Vendor payments -- nearly $46.4 million
Tax refunds -- over $87.5 million
Working capital -- nearly $38.9 million
Repayment of balance owed on local bank 1999 payroll loan -- more than $20.9 million
This would add up to nearly $193.7 million. However, Krigger in his written statement cited a balance of about $75.3 million, all of it earmarked for expenditure: nearly $46.5 million for more tax refunds, over $13.8 million for operating expenses and $15 million for a retirement incentive plan.
No new retirement incentive plan is in place. During the committee hearing, Sens. Donald "Ducks" Cole and Almando "Rocky" Liburd confronted Office of Management and Budget director Ira Mills about their retirement bill that the Government Employees Retirement System Board rejected earlier this year. Nothing was resolved in a heated discussion of the measure.
Mills was to provide Berry a further breakdown of funds.