Gov. Charles W. Turnbull signed into law Thursday a bill passed in last week's special session of the Legislature that would appropriate $11 million from the Insurance Guaranty Fund and other sources to placate striking teachers.
He line-item vetoed two amendments, one utilizing $20 million from the Public Finance Authority for government employees' salaries and another requiring the government to make up any difference between the $50 million insurance fund cap and its actual balance.
The bill also included a revised early retirement package for government employees which the governor signed.
In a statement released Thursday night, Turnbull called the $11 million deal "a gamble that should be taken in the interest of our children."
But taking $20 million from the PFA was different, he said.
"Treading near the border of financial risk-taking for the sake of our children is a far cry from dancing a waltz in the middle of a hall of fiscal lunacy," Turnbull said in the statement. "We cannot risk the entire credit of this government or chance an event of default that would trigger the recall of a single bond by our creditors to indulge a delusion of monies that neither exist nor represent uncommitted assets."
The line-item veto of the insurance fund amendment is likely to draw sharp criticism from the insurance industry. Lloyds Underwriters, the primary contributor to the insurance fund, warned last week that the company could pull out of the Virgin Islands if the original unamended bill passed.
But industry leaders who had vehemently opposed borrowing from the fund expressed some relief earlier in the week, saying the amendment eased some of their fears.
In his statement Thursday, the governor said Lt. Gov. Gerard Luz James II, acting as insurance commissioner, had urged a veto of the amendment. Turnbull said more analysis and input on such a measure was needed to protect policyholders.
The $11 million for teachers' salaries also calls on the West Indian Co. Ltd. and the V.I. Water and Power Authority to ante up $1 million. WAPA's board of directors on Thursday had asked Gov. Charles Turnbull to hold off on signing the bill into law; it is unclear how the utility will react to its approval.
The governor cited the need to have funds available immediately for a new contract with the American Federation of Teachers, whose local members are in the eighth day of a strike. The AFT earlier rejected a proposal that provided $8.6 million for previously negotiated salary step increases.
