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Charlotte Amalie
Saturday, May 18, 2024
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ECONOMIC DEVELOPMENT REFORM IN THE WORKS

A proposal to overhaul the Industrial Development Commission received lukewarm reaction from the agency’s executive director in Senate hearings Monday.
The Committee on Economic Development and Agricultural and Consumer Protection heard testimony on a bill aimed at establishing the V.I. Economic Development Agency. The proposed agency would be comprised of the IDC, the Government Development Bank and the Bureau of Economic Research.
At Monday’s hearing, senators heard from Frandelle Gerard, IDC executive director, and Wendall Snider, president of the St. Croix Hotel and Tourism Association and general manager of the Hibiscus Beach Hotel. Both said they had only received a copy of the bill, sponsored by Sens. David Jones and Donald "Ducks" Cole, on Friday afternoon and didn’t have a chance to study it thoroughly.
Still, Gerard said any revision to current law must be accompanied by an effort to educate the people of the Virgin Islands about the goal behind investment incentives.
"We can’t legislate attitudes. The adversarial attitude between the Legislature and the private sector . . . leaves me distressed," Gerard said. "We need a better understanding of the global economy and what role the Virgin Islands can play."
Gerard said a shortfall in the proposal is that it doesn’t provide funding for the new agency. According to the proposed bill, two-thirds of the agency’s funding would go toward promoting the territory to investors while the balance would be used for compliance and administration.
"I would like to see the authority given the opportunity to see how their budget is divided," Gerard said. "Depending on the general fund makes this less than semi-autonomous authority."
Snider said that the territory must collectively "break all paradigms" when thinking about rebuilding the local economy. He said he was concerned that the proposed bill would only add more government bureaucracy.
"I would hope that the intent of the bill is to streamline the government," Snider said, adding that two things must happen for that to occur: the government must be downsized and the private sector be given the stimulus to grow.
Gerard, meanwhile, said that the only reason new IDC applicants are coming to the territory is because of the federal tax exemptions available. Otherwise, she said, the incentives given by the Virgin Islands are "weak" when compared to other jurisdictions.
"Despite the attitude, the federal tax benefit is significant enough to do business in the territory," she said. "At the end of the day we put very little on the table compared to our competitors."
Because Gerard didn’t have time to prepare a review of the proposed bill she said she would have her staff analyze it over the next two weeks and submit a critique to Jones by Sept. 8.
Attending Monday’s hearing were Sens. Gregory Bennerson, Roosevelt David, Anne Golden and committee chairman David Jones. Non-member Cole also attended.

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