89.3 F
Charlotte Amalie
Thursday, June 30, 2022
HomeNewsArchivesPOLICY AGENDA FOR THE 24th V.I. LEGISLATURE

POLICY AGENDA FOR THE 24th V.I. LEGISLATURE

Summary
As the 24th Legislature comes into office, we are confronted with fundamental fiscal, economic, political and social crises in the Virgin Islands. We are determined to take a proactive approach to creating solutions in a way that ensures that all the people of this territory have an equal chance at participating in the revitalization of the Virgin Islands community. We have identified some key areas in which changes must be made, and we will be engaged in continuing discussion and exchange with all sectors of the community to ensure that we pursue the necessary changes in the best possible manner. Some of these areas include:
Education
– Seek federal assistance for major investments in the educational infrastructure.
– Seek funding for teacher incentives.
– Reform the structure of the educational system in order to create an effective, hands-on governing body.
– Collaborate with the Board of Education in reforming the curriculum to meet the cultural and academic needs of our Virgin Islands students in the 21st century.
– Mandate conversion of the Vocational School on St. Croix into a polytechnic institute to better meet the demands of today's workplace and to help establish the Virgin Islands as a technical service hub in the Caribbean.
– Establish competitive standards for student and teacher competence and performance.
– To have at least 40% of classrooms hooked up to the Internet by the year 2002.
Economic Development
– Ensure that the IDC has the staff and resources necessary to identify and aggressively recruit industries whose operations are compatible with the environmental and social needs of the Virgin Islands.
– Reform IDC legislation to target incentives at particular types of economic activity that will bring the greatest possible amount of opportunities for Virgin Islands residents.
– Revisit legislation creating a Tourism Authority to ensure that there is a wider base of representation from the private sector and that the government plays a substantial role in setting tourism policy.
– Promote, through a combination of oversight and legislation, the following goals relative to the improvement of the tourism industry:
– Improvement of the transportation infrastructure in order to ease problems transporting tourists and residents.
– Greater promotion of the V.I. tourism product among various markets that have heretofore been underutilized, such as the African-American market, teachers (to encourage summertime travel and reduce the seasonality of the industry), and the Latin American market.
– An increase in the number and variety in night-time activities in order to stimulate the growth of land-based tourism.
– Stimulate agriculture and aquaculture production in order to meet a greater portion of local consumer demand and increase the multiplier effect within the economy.
– Reform legislation relative to the Government Development Bank to ensure greater access to capital for small businesses at rates more favorable than those offered by private lending institutions.
– Reprogram capital improvement funding towards projects that are directly targeted at economic development initiatives.
– Aggressively pursue the return of Gasoline Excise Taxes to the Virgin Islands and earmark significant portions of such monies to economic development initiatives, infrastructure development and to retroactive wage increases owed to V.I. government employees.
Improving the standard of living for Virgin Islands residents
– Seek all possible means of funding in order to bring government employees on step in accordance with their respective collective bargaining agreements.
– Enhance affordable housing programs in order to provide more homeownership opportunities for working people in the Virgin Islands.
Government Reform
– Increase government efficiency and public services by placing a larger amount of services and information on-line. This will create an on-line equivalent of 'one-stop' centers for activities such as getting business licenses, etc., will increase government's ability to serve the public, increase the 'democratization of knowledge', and stimulate the development of computer skills among both government workers and the public.
– Based on the success of the voluntary separation incentive program, continue to explore ways of reducing the government workforce without dislocating workers or impairing the ability of government to provide services to the public.
– Establish a comprehensive program of worker training and retraining. This will improve worker competence, efficiency, and productivity, and it will enable more government workers to enter private sector employment or entrepreneurship on an advantageous footing.
– Enhance tax collection efforts by providing pay incentives, commissions and bonuses for revenue collection agents.
– Vigorously utilize the Legislature's oversight functions to ensure government accountability and compliance with existing laws and regulations.
Health Care
– Upgrade the overall quality of health care delivery systems in order to improve the quality of life for Virgin Islands residents and to keep monies spent on health care circulating within the economy. In addition, health care tourism has become a major component of the health care industry. By offering services desired by visitors, we will be able to inject more money into the economy as visitors from the Eastern Caribbean and the U.S. visit the territory to obtain health care services.[REKJ1]
– Work collaboratively with the Delegate to Congress to petition Congress to lift the cap on federal Medicaid matching funds. Placing the territories on equal footing with the 50 states in terms of the formula for Medicaid funds will increase health care funding in the territory by over $50 million per year.
– Develop top rate cardiac and cancer facilities in the Virgin Islands in order to increase the circulation of money within the Virgin Islands by inducing more Virgin Islands residents to obtain health care services here at home.
Reforming the Legislative Branch
– Eliminate per diem payments to senators for same day travel.
– Cease practice of assigning vehicles to senators for full-time personal use.
– The 24th Legislature will be operating on a budget that is $1 million less than the previous legislature, and unlike the previous legislature, we are committed to living within our budget.
– Within six months to a year, text of all bills will be available on line, thus making the public more knowledgeable and involved in the process of shaping public policy.
Education
We intend to couple demands for higher student and teacher standards with an effort to obtain federal funds, particularly earmarked for education improvement, to increase teacher pay, modernize instructional materials and to rebuild education infrastructure.
In 1983, if we use the publication of the report 'America's Schools in Crisis' as an arbitrary beginning point, American policy makers began to take a serious look at educational policy after being stung by revelations that American students ranked at the bottom of the heap among industrialized nations. More importantly, leaders in both the public and private sector began to warn that the declining skills of American high school graduates posed a serious threat to the nation's ability to remain competitive in the increasingly knowledge-based global economy. In the ensuing fifteen years, significant efforts to improve American education have been undertaken at all levels of government and billions of dollars have been expended in a nationwide effort to upgrade the skills of its workforce. In jurisdictions all across the country, two concomitant developments could be observed:
· Both the public and policymakers sought to demand more result-based accountability from their school systems by adopting new standards, or by raising old ones, for student and teacher competency and achievement.
· Between the mid-1980's
and the present, there has been a significant increase in teacher pay and in expenditures to upgrade and maintain the educational infrastructure, This is particularly so in terms of linking schools and classrooms to the information superhighway. It should be noted, of course, that this decade has been characterized by a flourishing economy and unprecedented level of fiscal health for jurisdictions across the country.
For the Virgin Islands, in contrast, the last decade has been one characterized by an economic and fiscal malaise. This has resulted in the inability to make significant investments in the educational structure and in a real dollar decline in the wages of teachers due to the government's inability to raise teacher's salaries in accordance with their negotiated contract. Student performance has declined to the point that it now ranks at the very bottom of the nation in nationally administered achievement tests. It is obvious that the current state of public education in the territory poses a dire threat to the present and future development of the Virgin Islands economy.
While a number of policymakers view the current situation with grave alarm, the ongoing fiscal crisis makes it impossible to devote significant funds for upgrading schools and teacher incentives. We believe that one part of the solution is to approach the federal government with a comprehensive analysis of the current situation, a program for reforming the education system, and a request for federal assistance. This assistance would be earmarked to the purposes of educational improvement and restructuring and to a comprehensive program of employee training and skills enhancement in both the public and private sectors.
This would result in the development of a skilled and productive workforce that would enhance the attractiveness of the Virgin Islands as a site for investment. In addition, the increased productivity and skills of public sector employees will enable two developments:
-With increasing skills, government employees will be in better positions to enter the job market in the private sector or to engage in entrepreneurship.
-The increasing productivity of government employees will allow the government to downsize without impairing the ability to carry out its functions.
Economic development
The structural crisis and the policy challenge
The deceased Senator Earle B. Ottley was justly proud of his contributions towards the creation of what he called a 'middle-class society' in the Virgin Islands. While tourism and petrochemical manufacturing were the cornerstones of the Virgin Islands economy, the middle-class of which Ottley spoke was created primarily by the creation of government jobs and the initiation of affordable housing programs which allowed tens of thousands to own a home for the first time. For some fifteen years now, we have witnessed the erosion of the very base of the middle class that was created in the 1960's. The fact is that aside from the taxi-drivers, who are the largest identifiable group of locals who have any type of entrepreneurial foothold in the tourism industry, there has never been a very large number of middle to high income jobs generated by the tourism industry. This situation has been exacerbated by the erosion in the Virgin Islands' share of the Caribbean tourism market.
The government, which was and is the major source of white-collar employment, eventually found that it could not continue to expand fast enough to keep pace with population growth. As the government fiscal crisis has grown, the government has been forced to thin its ranks, thereby decreasing the number of opportunities for its residents. In the manufacturing industries on St. Croix, the Hess lockout and the eventual closing of the alumina plant spelled disaster for the Crucian middle class as early as the mid-1980's. With the exception of short-lived spikes caused by events such as post-Hugo reconstruction or construction projects at Hess/Hovensa, the last fifteen years have witnessed a constant decline in the size of the middle class on St. Croix.
We have finally come face to face with the structural factors that lead to our economic and fiscal situation. We live in a U.S. territory with a U.S. minimum wage and a higher cost of living than the U.S. mainland. Furthermore, we are sufficiently American in culture and taste that we have high expectations and high standards as to what constitutes a decent quality of life in material terms. At the same time, our economy is very much that of a Third World nation in terms of the prevalent types of economic activity. If we intend to improve the quality of life for our people it is imperative that we take the necessary steps to transform the Virgin Islands economy into a First World economy that provides the opportunities that are necessary for the masses of our people to advance. It will require that we carry out the simultaneous steps of upgrading the skills of our workforce, improving the quality of education that we provide our young people, and attracting industries that provide the types of jobs that will keep our most skilled people at home and provide opportunities for our less skilled people to improve their skills and move up the economic ladder. This is the only way that the Virgin Islands will ever again be able to be called a 'middle class society'.
Maintaining and improving our tourism product
Any discussion of our economic situation must begin with the tourism industry inasmuch as tourism has been and continues to be the dominant economic activity in the Virgin Islands, providing over 60% of our Gross Domestic Product. In the face of increasing competition from our neighbors and the astonishing growth of the tourism industry in Cuba and the Dominican Republic, we must take a proactive approach to keep tourism product on the cutting edge of the industry. Towards that end, the Legislature is committed to seeking every means to maintain and strengthen the Virgin Islands' competitive position.
One of the major policy initiatives of the last few years relative to the tourism industry was the language contained in the Omnibus Authorization Act of 2000, passed last December and awaiting action by the Governor, which would create an autonomous Tourism Authority, controlled by the private sector, which would set tourism policy and engage in development projects and other initiatives aimed at improving the V.I. tourism product. Unfortunately, however, the legislation as drafted would, for all intents and purposes, remove the government from any significant role in shaping tourism policy and would place that power largely in the hands of the hotel associations and chambers of commerce.
This legislature supports the formation of a Tourism Authority and notes that a number of jurisdictions across the nation have formed such bodies, based on the concept of a partnership between the public and private sectors, to set tourism policy. However, we believe that it is vital that such bodies be partnerships in fact, rather than just in name. As written the current legislation would place jurisdiction primarily in the hands of a few groups within the private sector. Regardless of whether the current bill is signed or vetoed by the Governor, this legislature intends to revisit the concept of the Tourism Authority with an eye towards establishing an authority which:
· Creates an equitable balance between the public and private sectors in setting tourism policy; and
· Widens the representation of private sector groups on the Authority' s governing board as opposed to merely the hotel associations, the chambers of commerce and the taxi associations; and
It is our hope that any Tourism Authority established would consider as part of their policy agenda the following:
· Promotion of land-based packages to cruise ship tourists who according to survey data, indicate a high level of satisfaction and a willingness to return to the V.I. for a land-based vacation;
· Increased targeting of promotion ef
forts at demographic groups that have been underutilized such as the African-American market, teachers (who would visit during the summer and thus mitigate seasonal nature of the industry), and the Latin American market.
· Providing financial or other assistance to stimulate the establishment of more nighttime activities, thus increasing the attractiveness of the V.I. for land-based, overnight stays. Survey data indicates that the lack of night-time activities, particularly on St. Croix, presents one of the major stumbling blocks to the further strengthening of the tourism industry in the V.I.
Finally, no discussion of the tourism industry would be complete without addressing the transportation infrastructure. Again, survey data has indicated that the difficulties involved in transporting tourists to and from various attractions in the V.I. is the major source of complaints among tourists and is a major factor inhibiting the further growth and development of the industry. This legislature will be involved in intense discussion with all players in the tourism industry to collectively find ways that we can ease traffic congestion and make it easier to get around the islands. In this way, we can increase the size of the economic pie provided by tourism to the benefit of all.
Economic Diversification-attracting new industries and investment
Although the reality of the matter didn't fully strike home for policymakers and the public until the budgetary windfalls from post-Hurricane Hugo rebuilding dried up, the fact is that by the middle of the 1980's revenues generated from the tourism sector and the declining manufacturing sector on could no longer keep pace with the growing costs of the government bureaucracy. It was also becoming clear by the beginning of the decade that fundamental changes in the geopolitical landscape would bring about equally profound changes in the global economy. Political liberalization would bring about a concomitant opening of the world market for commodities and labor, thus creating an unprecedented mobility of capital across national borders and thus, an increasing global division of labor.
For the Virgin Islands in particular, this meant that investment capital for tourism development would increasingly gravitate to other Latin American and Caribbean locations where the lower cost of labor provides a competitive advantage vis á vis the Virgin Islands. It also meant that the federally-mandated wage scale, higher than that of our neighbors in the Caribbean, would dictate that the Virgin Islands compete in different economic sectors for investment and trade. The Virgin Islands, by necessity, would have to participate in the knowledge-based sectors, where relatively high wages are in line with the wage scale and the cost of living in the Virgin Islands. For a variety of reasons, however, policymakers in the 1980' s and 90's failed to respond to this policy challenge by pursuing policy initiatives that would attract investment in knowledge-based industries and upgrading the skills of the workforce so that it could participate in such activity. As a result, the Virgin Islands is forced, at this juncture, to play catch up to the industrialized nations of the world in both these areas.
To that end we must work closely with the newly established Tax Study Commission to:
· Restructure and revitalize the Industrial Development Commission by developing its capability to identify and attract businesses to the Virgin Islands whose activities would benefit both the companies and the V.I. public.
· Target tax incentives more selectively at industries whose nature and activities promote the development of more opportunities for Virgin Islands residents to obtain jobs that pay a decent wage.
· Provide tax incentives that encourage employers to provide training and educational opportunities for their workers.
· Reform the laws and the enforcement tools and practices of the I.D.C. so that the people of the Virgin Islands can be ensured their fair share of revenues and concessions as per the established tax benefit agreements.
Investing in our economy-Capital Projects and infrastructural development
The lack of capital projects geared towards economic development has been a major failing of the V.I. government in recent years. In recognition of the need for such projects, this legislature intends to move swiftly to reprogram unexpended capital improvement funds towards projects geared at stimulating economic growth. This type of public investment in the economy is vital to the development of a vibrant private sector that will be capable of providing significant jobs and economic opportunities for our residents.
Pursuing federal funds and return of the Gasoline Excise Taxes
Even a cursory look at the fiscal plight of the government clearly reveals that at present, the government does not have the financial wherewithal to make many of the investments that are necessary in our educational system and our infrastructure. Furthermore, the government is badly in need of funds with which to pay retroactive wages and to bring employees on step. One of the means by which these funds can be obtained is to pursue a two-pronged approach with the federal government by which we:
· Revive the issue of returning excise taxes on fuel produced here in the Virgin Islands. Based on the groundwork already laid by retired Presiding Judge Verne Hodge, the monies that may already be owed to the Virgin Islands government exceeds a half billion dollars and could go a long way towards addressing some of the long-standing financial issues facing the government.
· Seek federal assistance for strategic investments in education and infrastructure development which are vitally important to the modernization and revitalization of our economy, but which are clearly beyond our present financial ability to pursue.
Any detailed examination of America's economic recovery in the 1990's reveals that the bulk of job creation took place in the small and medium sized businesses. Any program for economic development in the Virgin Islands must address the pressing needs of the small business community in the V.I. As we see it, the primary problem affecting small businesses are threefold:
1. The generally poor state of the economy reduces the disposable income to purchase the various services and commodities offered by the small business sector.
2. Lack of access to capital.
3. Lack of access to business skills and technical assistance.
It is vitally important to upgrade the capabilities and functions of the Government Development Bank in order to facilitate small businesses' access to capital. The current situation, in which monies lent by the Government Development Bank are on terms equivalent to those offered by banks and other private lending institutions, must be radically altered if we are serious about the survival of existing small businesses and the creation of new ones.
In addition, we must strengthen the capabilities of the SBDA and the SBDC in terms of providing technical assistance and expertise to small business people. Today's competitive business climate demands the utilization of the best and most modern techniques of business management in order for small businesses to survive. Many of our small business people are experts in providing a particular product or service, but do not have the necessary business skills to maximize their business' potential. The inadequate staffing levels of the SBDA and SBDC dictate that these businesses cannot, currently get the support that they need to foster the development of a strong entrepreneurial sector. A relatively small investment in these two agencies can reap significant economic benefits for the territory.
In seeking to revitalize the economy of the Virgin Islands we must recognize first and foremost that we simply cannot be content to return to the old days of the tourism boom or to simply improve how we have conducted the business of tourism. As I have been
saying of over eight years, the technological revolution and the intense globalization of capital over the course of the last decade has created a situation in which the Virgin Islands is now forced to change or to perish.
Improving the quality of life for Virgin Islands residents
Providing a decent living wage for government employees This legislature is committed to pursuing all possible means of bring our government employees on step and making progress towards the payment of retroactive wage increases. For too long our public servants have suffered constant erosion in their standard of living as the cost of living has risen out of proportion to their incomes. While we seek to upgrade the skills of our workers and improve government productivity, we must all strive to compensate them fairly and provide all employees with a decent living wage with which to support their families. We pledge that any increases in revenues will be followed with principled attempts to improve the standard of living for government employees.
Providing affordable housing and homeownership opportunities
The two cornerstones of the effort to create and maintain a viable middle class in the Virgin Islands has been and continues to be the provision of economic opportunities and the provision of affordable housing. Our small landmass and the nature of the real estate market in the Virgin Islands dictate that at market prices, homeownership will continue to be beyond the reach of many Virgin Islands residents. As a result, the government must continue to act on behalf of its citizens to ensure that working people will have an opportunity to pursue the American dream of owning their own home. This legislature will be steadfast in its commitment to acquire land that can be made available to working people at affordable prices, and to provide incentives for private housing developers to make homes available to residents at affordable prices.
Agriculture and import-substitution
While growing the economy and attracting new businesses and investment is clearly a vital part of any plan for the revitalization of the Virgin Islands economy, it is clear that we must also strive to make the economy more integrated and to increase the circulation of money within the economy. Ensuring that a dollar circulates within the economy three times before leaving the Virgin Islands as opposed to one time has the same economic effect as bring two additional dollars into the economy. This phenomenon, called the multiplier effect by economists, is vital to creating a healthy economy and increasing the prosperity of Virgin Islands residents. One of the chief methods of doing this is by decreasing our reliance on exports through a program of import-substitution. To the extent that we can replace imported products for local consumption with locally-produced items, we will be able to develop healthy linkages between the various sectors of the economy.
One area in which we must pursue this path of development is in the production of food. While our geography and the conditions of the world market dictate that the possibilities of producing food for export are extremely limited, all economic data indicates that we are very capable of producing more of the food that we consume locally. For example, the development of a viable aquaculture industry, combined with increasing the production from natural fisheries, would decrease our reliance on imported seafood. One notes, for example, that all the shrimp consumed by the local public as well as by the hotels and restaurants are imported from abroad. While we clearly cannot produce shrimp cheaply enough to compete on the world market. We can produce shrimp and other seafood cheaply enough to provide a fresh quality product to local buyers at a price competitive with what we currently pay for shrimp. According to Dr. James Rakocy of the University of the Virgin Islands, the establishment of shrimp farms, particularly on St. Croix, can lead to the production of over 100,000 pounds of shrimp annually. Another fine example which was actually put into practice is the production of lettuce through hydroponics farming. While the lettuce produced cannot compete on the world market as an export product because of price, it does provide, for local consumption, a product that is unmatched in freshness and quality and which is cost-competitive due to the shipping costs and the middle men involved with imported lettuce. It is time for both the public and the private sector to pursue partnerships with the University of the Virgin Islands, which has taken the lead in aquaculture research, so that we can begin to actually produce aquacultural products on a large enough scale to satisfy a larger percentage of local demand.
Another example is in the area of poultry. The U.S. Virgin Islands Overall Economic Development Plan, produced in 1992 and subsequently ignored by V.I. policymakers, identifies poultry farming as one area that if stimulated, could substantially reduce our reliance on exports and develop a viable agricultural sector in the Virgin Islands. Towards that end I hope to see this legislature aggressively pursue a program of financial and technical assistance for producers of locally consumed products.
Tax reform Over the last three decades, the Virgin Islands has placed a substantial proportion of its economic eggs in the basket of tax incentives. Central to this entire program has been the idea that giving tax breaks to businesses will induce increased investment and therefore create more jobs, and that the government revenues that are sacrificed through tax incentives will be offset by the income tax revenues gained from the increased number of employees hired by the businesses receiving benefits. This economic approach, is fatally flawed as a development tool in the Virgin Islands of the 21st century for the following reasons:
· It assumes that manufacturing will be the dominant area of economic diversification for the Virgin Islands. . The paradigm which informs the IDC program is based on economic models of the the 1950's and '60's, as systemized in the writings of economist Arthur Lewis, in which the prescription for Third World economic development was to utilize their competitive advantages of mild year-round temperatures and cheap labor to make advances in export agriculture, manufacturing, and tourism. In addition, Virgin Islands and Puerto Rican policymakers reasoned correctly that in the geopolitical climate of that time, the rising tide of nationalism and revolutionary movements in the Third World made U.S. territories a safer climate for offshore U.S. investment. History shows us that these factors were indeed driving forces behind the explosion in manufacturing development which took place in Puerto Rico after World War II, and in the tourism boom experienced by the Virgin Islands in the years following the Cuban Revolution of 1959.
With the fall of the Berlin Wall and the advent of the microcomputer and information technology revolution, the economic and political conditions which led to such explosive development had changed sufficiently by the late 1980's as to raise serious questions about the applicability of the Lewis model to the Virgin Islands. By the early 90's, there could be no doubt, in the minds of thoughtful observers, that the Puerto Rican model was dead as far as the Virgin Islands is concerned.
In fact the global division of labor has created a situation wherein the nations of the Third World, with their lower wage scales, have a decisive competitive advantage in most types of manufacturing except for the most highly technological areas. The Virgin Islands is not poised to compete on either end of the manufacturing scale.
· Surveys of corporate executives consistently show that other factors, such as workforce productivity, a skilled labor pool, infrastructure, and quality of life are of equal or greater importance in investment decisions, particularly in today's knowledge-based economy in which people, as opposed to machines, are the chief crea
tors of wealth in the wealthy countries.
· The tourism sector, which is the most logical beneficiary and the largest participant in the tax-incentive programs, is a relatively low-wage industry. As such, the type of economic activity most encouraged in the Virgin Islands has helped to foster the development of a low-skill, low-wage labor force.
This legislature must work closely with the Tax Reform Commission, which we anticipate will be revitalized by legislation passed in December, to create a rational policy of business taxation that will provide incentives for investment, growth and employment while ensuring that we maintain a healthy tax base. To that end, it is my belief that we must target our tax incentives at more knowledge-based industries that can provide more lucrative jobs and more opportunities for our young people.
It is commonly accepted that there are large numbers of outstanding taxes that the government has done a poor job of collecting. If the government is to maintain a healthy tax base without increasing the burden of taxation on our people, it is essential that the government make every effort to collect all taxes that are due to it. Towards this end, this legislature intends to pass legislation that would provide financial incentives for revenue collection agents so that private sector-type incentives can be utilized for the public good.
Government Reform
Clearly any program of revitalization in the Virgin Islands must address not only the fiscal crisis of the government but must also address the quality of service that we provide to the public. Towards that end, this legislature will pursue initiatives that will bring the government in line with the technological revolution that is bringing about fundamental change in the way that both the private and public sectors do business.
Bringing the Technological Revolution to Government
In a growing number of jurisdictions across the country and around the world, governments are providing more and more of their services on line. From filing tax returns to applying for business and drivers' licenses and unemployment benefits, governments are making it possible for its citizens to receive government services from the comfort of their homes or offices. This will bring about a number of benefits for the public, the government, and the economy:
· It will allow for faster and more efficient service to the public.
· It will bring about the long-awaited "one stop" process for the provision of a wide array of government services by eliminating or significantly reducing the need to go to two or three offices in order to obtain one license or permit.
· It will enable the government to do more with less by reducing the number of human inputs in government operations.
· It will allow the public easier, quicker, and more complete access to public records and information.
· It will foster the development of technological skills both within the government and among the public, thus increasing the skills of the V.I. workforce and enhancing our competitive position in the new global economy.
Worker training and retraining
If we have learned anything from the ongoing economic and technological revolution of the last decade, it is that people, not machines are the driving force behind the progress of any business or government entity. As such, it is unrealistic to expect that the simple upgrading of technological equipment will automatically bring about an improvement in the way the government does business. Therefore, any government reform must have, as an integral component, a program to upgrade the skills of government workers. This legislature will explore and pursue initiatives to mandate the ongoing training and retraining of workers in basic competencies necessary for survival in the knowledge-based economy and in the particular processes involved in the performance of their duties. This will result in a vast improvement in government performance and efficiency, and will further enhance the ability of Virgin Islands workers to compete in the new global economy. This type of development will contribute greatly to any efforts to attract new industries and high-paying jobs to the Virgin Islands.
Continued initiatives to downsize government
Given the success of the Voluntary Separation Incentive Program which according to estimates will save the government approximately $60 million over a five year period, we will continue to explore other innovative means to further downsize the government without impairing its ability to provide services or unnecessarily displacing employees. In this way, we hope to reduce government costs and at the same time encourage the migration of workers into private sector jobs and entrepreneurship.
Increasing government accountability
While we seek to improve the efficiency and productivity of government, it is vitally important to make the government accountable to its citizens and to reduce waste in government. This legislature will be aggressive in carrying out its oversight powers and responsibility to hold government agencies accountable for properly carrying out their functions and for properly expending public funds.
Improvements within the Legislature
Within the legislature itself, I intend to continue with the program of computerization that I began as President of the 21st Legislature. Within six months to a year, the text of all bills introduced in the Legislature will be available on our website, thus enabling the public to be fully informed of the issues that affect them. In addition, we will be introducing new processes that will allow more of the internal business of the body to be carried out on a paperless basis, thus improving the internal operations of the Legislature.
As announced at the press conference held last year by the incoming majority caucus, there will be additional initiatives undertaken to reduce legislative expenditures in areas relating to staffing, air travel, and ground transportation:
· During the 23rd Legislature, I introduced legislation, Bill No. 23-0040, to eliminate per diem payments to Senators for same day travel. This followed recommendations made by previous audits of legislative spending which showed that paying Senators $30 per day for same day travel represented an unacceptable expense. Unfortunately the Senate Committee on Finance, to whom the bill was assigned, allowed the bill languish in committee without taking action for over a year and a half so that the bill died in committee. One of the first acts of this legislature, along with ceasing the use of vehicles for senator's personal use, will be to eliminate these per diem payments for same day travel.
· The legislature's budget for this term will be $1 million less per year than the previous legislature. Unlike the previous legislature, which overspent its appropriation, we are committed to living within this budget and setting an example of doing more with less.

Print Friendly, PDF & Email
Keeping our community informed is our top priority.
If you have a news tip to share, please call or text us at 340-228-8784.




Support local + independent journalism in the U.S. Virgin Islands

Unlike many news organizations, we haven't put up a paywall – we want to keep our journalism as accessible as we can. Our independent journalism costs time, money and hard work to keep you informed, but we do it because we believe that it matters. We know that informed communities are empowered ones. If you appreciate our reporting and want to help make our future more secure, please consider donating.

STAY CONNECTED

20,771FansLike
4,757FollowersFollow

FROM FACEBOOK

Comments Box SVG iconsUsed for the like, share, comment, and reaction icons
Load more
Summary
As the 24th Legislature comes into office, we are confronted with fundamental fiscal, economic, political and social crises in the Virgin Islands. We are determined to take a proactive approach to creating solutions in a way that ensures that all the people of this territory have an equal chance at participating in the revitalization of the Virgin Islands community. We have identified some key areas in which changes must be made, and we will be engaged in continuing discussion and exchange with all sectors of the community to ensure that we pursue the necessary changes in the best possible manner. Some of these areas include:
Education
- Seek federal assistance for major investments in the educational infrastructure.
- Seek funding for teacher incentives.
- Reform the structure of the educational system in order to create an effective, hands-on governing body.
- Collaborate with the Board of Education in reforming the curriculum to meet the cultural and academic needs of our Virgin Islands students in the 21st century.
- Mandate conversion of the Vocational School on St. Croix into a polytechnic institute to better meet the demands of today's workplace and to help establish the Virgin Islands as a technical service hub in the Caribbean.
- Establish competitive standards for student and teacher competence and performance.
- To have at least 40% of classrooms hooked up to the Internet by the year 2002.
Economic Development
- Ensure that the IDC has the staff and resources necessary to identify and aggressively recruit industries whose operations are compatible with the environmental and social needs of the Virgin Islands.
- Reform IDC legislation to target incentives at particular types of economic activity that will bring the greatest possible amount of opportunities for Virgin Islands residents.
- Revisit legislation creating a Tourism Authority to ensure that there is a wider base of representation from the private sector and that the government plays a substantial role in setting tourism policy.
- Promote, through a combination of oversight and legislation, the following goals relative to the improvement of the tourism industry:
- Improvement of the transportation infrastructure in order to ease problems transporting tourists and residents.
- Greater promotion of the V.I. tourism product among various markets that have heretofore been underutilized, such as the African-American market, teachers (to encourage summertime travel and reduce the seasonality of the industry), and the Latin American market.
- An increase in the number and variety in night-time activities in order to stimulate the growth of land-based tourism.
- Stimulate agriculture and aquaculture production in order to meet a greater portion of local consumer demand and increase the multiplier effect within the economy.
- Reform legislation relative to the Government Development Bank to ensure greater access to capital for small businesses at rates more favorable than those offered by private lending institutions.
- Reprogram capital improvement funding towards projects that are directly targeted at economic development initiatives.
- Aggressively pursue the return of Gasoline Excise Taxes to the Virgin Islands and earmark significant portions of such monies to economic development initiatives, infrastructure development and to retroactive wage increases owed to V.I. government employees.
Improving the standard of living for Virgin Islands residents
- Seek all possible means of funding in order to bring government employees on step in accordance with their respective collective bargaining agreements.
- Enhance affordable housing programs in order to provide more homeownership opportunities for working people in the Virgin Islands.
Government Reform
- Increase government efficiency and public services by placing a larger amount of services and information on-line. This will create an on-line equivalent of 'one-stop' centers for activities such as getting business licenses, etc., will increase government's ability to serve the public, increase the 'democratization of knowledge', and stimulate the development of computer skills among both government workers and the public.
- Based on the success of the voluntary separation incentive program, continue to explore ways of reducing the government workforce without dislocating workers or impairing the ability of government to provide services to the public.
- Establish a comprehensive program of worker training and retraining. This will improve worker competence, efficiency, and productivity, and it will enable more government workers to enter private sector employment or entrepreneurship on an advantageous footing.
- Enhance tax collection efforts by providing pay incentives, commissions and bonuses for revenue collection agents.
- Vigorously utilize the Legislature's oversight functions to ensure government accountability and compliance with existing laws and regulations.
Health Care
- Upgrade the overall quality of health care delivery systems in order to improve the quality of life for Virgin Islands residents and to keep monies spent on health care circulating within the economy. In addition, health care tourism has become a major component of the health care industry. By offering services desired by visitors, we will be able to inject more money into the economy as visitors from the Eastern Caribbean and the U.S. visit the territory to obtain health care services.[REKJ1]
- Work collaboratively with the Delegate to Congress to petition Congress to lift the cap on federal Medicaid matching funds. Placing the territories on equal footing with the 50 states in terms of the formula for Medicaid funds will increase health care funding in the territory by over $50 million per year.
- Develop top rate cardiac and cancer facilities in the Virgin Islands in order to increase the circulation of money within the Virgin Islands by inducing more Virgin Islands residents to obtain health care services here at home.
Reforming the Legislative Branch
- Eliminate per diem payments to senators for same day travel.
- Cease practice of assigning vehicles to senators for full-time personal use.
- The 24th Legislature will be operating on a budget that is $1 million less than the previous legislature, and unlike the previous legislature, we are committed to living within our budget.
- Within six months to a year, text of all bills will be available on line, thus making the public more knowledgeable and involved in the process of shaping public policy.
Education
We intend to couple demands for higher student and teacher standards with an effort to obtain federal funds, particularly earmarked for education improvement, to increase teacher pay, modernize instructional materials and to rebuild education infrastructure.
In 1983, if we use the publication of the report 'America's Schools in Crisis' as an arbitrary beginning point, American policy makers began to take a serious look at educational policy after being stung by revelations that American students ranked at the bottom of the heap among industrialized nations. More importantly, leaders in both the public and private sector began to warn that the declining skills of American high school graduates posed a serious threat to the nation's ability to remain competitive in the increasingly knowledge-based global economy. In the ensuing fifteen years, significant efforts to improve American education have been undertaken at all levels of government and billions of dollars have been expended in a nationwide effort to upgrade the skills of its workforce. In jurisdictions all across the country, two concomitant developments could be observed:
· Both the public and policymakers sought to demand more result-based accountability from their school systems by adopting new standards, or by raising old ones, for student and teacher competency and achievement.
· Between the mid-1980's and the present, there has been a significant increase in teacher pay and in expenditures to upgrade and maintain the educational infrastructure, This is particularly so in terms of linking schools and classrooms to the information superhighway. It should be noted, of course, that this decade has been characterized by a flourishing economy and unprecedented level of fiscal health for jurisdictions across the country.
For the Virgin Islands, in contrast, the last decade has been one characterized by an economic and fiscal malaise. This has resulted in the inability to make significant investments in the educational structure and in a real dollar decline in the wages of teachers due to the government's inability to raise teacher's salaries in accordance with their negotiated contract. Student performance has declined to the point that it now ranks at the very bottom of the nation in nationally administered achievement tests. It is obvious that the current state of public education in the territory poses a dire threat to the present and future development of the Virgin Islands economy.
While a number of policymakers view the current situation with grave alarm, the ongoing fiscal crisis makes it impossible to devote significant funds for upgrading schools and teacher incentives. We believe that one part of the solution is to approach the federal government with a comprehensive analysis of the current situation, a program for reforming the education system, and a request for federal assistance. This assistance would be earmarked to the purposes of educational improvement and restructuring and to a comprehensive program of employee training and skills enhancement in both the public and private sectors.
This would result in the development of a skilled and productive workforce that would enhance the attractiveness of the Virgin Islands as a site for investment. In addition, the increased productivity and skills of public sector employees will enable two developments:
-With increasing skills, government employees will be in better positions to enter the job market in the private sector or to engage in entrepreneurship.
-The increasing productivity of government employees will allow the government to downsize without impairing the ability to carry out its functions.
Economic development
The structural crisis and the policy challenge
The deceased Senator Earle B. Ottley was justly proud of his contributions towards the creation of what he called a 'middle-class society' in the Virgin Islands. While tourism and petrochemical manufacturing were the cornerstones of the Virgin Islands economy, the middle-class of which Ottley spoke was created primarily by the creation of government jobs and the initiation of affordable housing programs which allowed tens of thousands to own a home for the first time. For some fifteen years now, we have witnessed the erosion of the very base of the middle class that was created in the 1960's. The fact is that aside from the taxi-drivers, who are the largest identifiable group of locals who have any type of entrepreneurial foothold in the tourism industry, there has never been a very large number of middle to high income jobs generated by the tourism industry. This situation has been exacerbated by the erosion in the Virgin Islands' share of the Caribbean tourism market.
The government, which was and is the major source of white-collar employment, eventually found that it could not continue to expand fast enough to keep pace with population growth. As the government fiscal crisis has grown, the government has been forced to thin its ranks, thereby decreasing the number of opportunities for its residents. In the manufacturing industries on St. Croix, the Hess lockout and the eventual closing of the alumina plant spelled disaster for the Crucian middle class as early as the mid-1980's. With the exception of short-lived spikes caused by events such as post-Hugo reconstruction or construction projects at Hess/Hovensa, the last fifteen years have witnessed a constant decline in the size of the middle class on St. Croix.
We have finally come face to face with the structural factors that lead to our economic and fiscal situation. We live in a U.S. territory with a U.S. minimum wage and a higher cost of living than the U.S. mainland. Furthermore, we are sufficiently American in culture and taste that we have high expectations and high standards as to what constitutes a decent quality of life in material terms. At the same time, our economy is very much that of a Third World nation in terms of the prevalent types of economic activity. If we intend to improve the quality of life for our people it is imperative that we take the necessary steps to transform the Virgin Islands economy into a First World economy that provides the opportunities that are necessary for the masses of our people to advance. It will require that we carry out the simultaneous steps of upgrading the skills of our workforce, improving the quality of education that we provide our young people, and attracting industries that provide the types of jobs that will keep our most skilled people at home and provide opportunities for our less skilled people to improve their skills and move up the economic ladder. This is the only way that the Virgin Islands will ever again be able to be called a 'middle class society'.
Maintaining and improving our tourism product
Any discussion of our economic situation must begin with the tourism industry inasmuch as tourism has been and continues to be the dominant economic activity in the Virgin Islands, providing over 60% of our Gross Domestic Product. In the face of increasing competition from our neighbors and the astonishing growth of the tourism industry in Cuba and the Dominican Republic, we must take a proactive approach to keep tourism product on the cutting edge of the industry. Towards that end, the Legislature is committed to seeking every means to maintain and strengthen the Virgin Islands' competitive position.
One of the major policy initiatives of the last few years relative to the tourism industry was the language contained in the Omnibus Authorization Act of 2000, passed last December and awaiting action by the Governor, which would create an autonomous Tourism Authority, controlled by the private sector, which would set tourism policy and engage in development projects and other initiatives aimed at improving the V.I. tourism product. Unfortunately, however, the legislation as drafted would, for all intents and purposes, remove the government from any significant role in shaping tourism policy and would place that power largely in the hands of the hotel associations and chambers of commerce.
This legislature supports the formation of a Tourism Authority and notes that a number of jurisdictions across the nation have formed such bodies, based on the concept of a partnership between the public and private sectors, to set tourism policy. However, we believe that it is vital that such bodies be partnerships in fact, rather than just in name. As written the current legislation would place jurisdiction primarily in the hands of a few groups within the private sector. Regardless of whether the current bill is signed or vetoed by the Governor, this legislature intends to revisit the concept of the Tourism Authority with an eye towards establishing an authority which:
· Creates an equitable balance between the public and private sectors in setting tourism policy; and
· Widens the representation of private sector groups on the Authority' s governing board as opposed to merely the hotel associations, the chambers of commerce and the taxi associations; and
It is our hope that any Tourism Authority established would consider as part of their policy agenda the following:
· Promotion of land-based packages to cruise ship tourists who according to survey data, indicate a high level of satisfaction and a willingness to return to the V.I. for a land-based vacation;
· Increased targeting of promotion ef forts at demographic groups that have been underutilized such as the African-American market, teachers (who would visit during the summer and thus mitigate seasonal nature of the industry), and the Latin American market.
· Providing financial or other assistance to stimulate the establishment of more nighttime activities, thus increasing the attractiveness of the V.I. for land-based, overnight stays. Survey data indicates that the lack of night-time activities, particularly on St. Croix, presents one of the major stumbling blocks to the further strengthening of the tourism industry in the V.I.
Finally, no discussion of the tourism industry would be complete without addressing the transportation infrastructure. Again, survey data has indicated that the difficulties involved in transporting tourists to and from various attractions in the V.I. is the major source of complaints among tourists and is a major factor inhibiting the further growth and development of the industry. This legislature will be involved in intense discussion with all players in the tourism industry to collectively find ways that we can ease traffic congestion and make it easier to get around the islands. In this way, we can increase the size of the economic pie provided by tourism to the benefit of all.
Economic Diversification-attracting new industries and investment
Although the reality of the matter didn't fully strike home for policymakers and the public until the budgetary windfalls from post-Hurricane Hugo rebuilding dried up, the fact is that by the middle of the 1980's revenues generated from the tourism sector and the declining manufacturing sector on could no longer keep pace with the growing costs of the government bureaucracy. It was also becoming clear by the beginning of the decade that fundamental changes in the geopolitical landscape would bring about equally profound changes in the global economy. Political liberalization would bring about a concomitant opening of the world market for commodities and labor, thus creating an unprecedented mobility of capital across national borders and thus, an increasing global division of labor.
For the Virgin Islands in particular, this meant that investment capital for tourism development would increasingly gravitate to other Latin American and Caribbean locations where the lower cost of labor provides a competitive advantage vis á vis the Virgin Islands. It also meant that the federally-mandated wage scale, higher than that of our neighbors in the Caribbean, would dictate that the Virgin Islands compete in different economic sectors for investment and trade. The Virgin Islands, by necessity, would have to participate in the knowledge-based sectors, where relatively high wages are in line with the wage scale and the cost of living in the Virgin Islands. For a variety of reasons, however, policymakers in the 1980' s and 90's failed to respond to this policy challenge by pursuing policy initiatives that would attract investment in knowledge-based industries and upgrading the skills of the workforce so that it could participate in such activity. As a result, the Virgin Islands is forced, at this juncture, to play catch up to the industrialized nations of the world in both these areas.
To that end we must work closely with the newly established Tax Study Commission to:
· Restructure and revitalize the Industrial Development Commission by developing its capability to identify and attract businesses to the Virgin Islands whose activities would benefit both the companies and the V.I. public.
· Target tax incentives more selectively at industries whose nature and activities promote the development of more opportunities for Virgin Islands residents to obtain jobs that pay a decent wage.
· Provide tax incentives that encourage employers to provide training and educational opportunities for their workers.
· Reform the laws and the enforcement tools and practices of the I.D.C. so that the people of the Virgin Islands can be ensured their fair share of revenues and concessions as per the established tax benefit agreements.
Investing in our economy-Capital Projects and infrastructural development
The lack of capital projects geared towards economic development has been a major failing of the V.I. government in recent years. In recognition of the need for such projects, this legislature intends to move swiftly to reprogram unexpended capital improvement funds towards projects geared at stimulating economic growth. This type of public investment in the economy is vital to the development of a vibrant private sector that will be capable of providing significant jobs and economic opportunities for our residents.
Pursuing federal funds and return of the Gasoline Excise Taxes
Even a cursory look at the fiscal plight of the government clearly reveals that at present, the government does not have the financial wherewithal to make many of the investments that are necessary in our educational system and our infrastructure. Furthermore, the government is badly in need of funds with which to pay retroactive wages and to bring employees on step. One of the means by which these funds can be obtained is to pursue a two-pronged approach with the federal government by which we:
· Revive the issue of returning excise taxes on fuel produced here in the Virgin Islands. Based on the groundwork already laid by retired Presiding Judge Verne Hodge, the monies that may already be owed to the Virgin Islands government exceeds a half billion dollars and could go a long way towards addressing some of the long-standing financial issues facing the government.
· Seek federal assistance for strategic investments in education and infrastructure development which are vitally important to the modernization and revitalization of our economy, but which are clearly beyond our present financial ability to pursue.
Any detailed examination of America's economic recovery in the 1990's reveals that the bulk of job creation took place in the small and medium sized businesses. Any program for economic development in the Virgin Islands must address the pressing needs of the small business community in the V.I. As we see it, the primary problem affecting small businesses are threefold:
1. The generally poor state of the economy reduces the disposable income to purchase the various services and commodities offered by the small business sector.
2. Lack of access to capital.
3. Lack of access to business skills and technical assistance.
It is vitally important to upgrade the capabilities and functions of the Government Development Bank in order to facilitate small businesses' access to capital. The current situation, in which monies lent by the Government Development Bank are on terms equivalent to those offered by banks and other private lending institutions, must be radically altered if we are serious about the survival of existing small businesses and the creation of new ones.
In addition, we must strengthen the capabilities of the SBDA and the SBDC in terms of providing technical assistance and expertise to small business people. Today's competitive business climate demands the utilization of the best and most modern techniques of business management in order for small businesses to survive. Many of our small business people are experts in providing a particular product or service, but do not have the necessary business skills to maximize their business' potential. The inadequate staffing levels of the SBDA and SBDC dictate that these businesses cannot, currently get the support that they need to foster the development of a strong entrepreneurial sector. A relatively small investment in these two agencies can reap significant economic benefits for the territory.
In seeking to revitalize the economy of the Virgin Islands we must recognize first and foremost that we simply cannot be content to return to the old days of the tourism boom or to simply improve how we have conducted the business of tourism. As I have been saying of over eight years, the technological revolution and the intense globalization of capital over the course of the last decade has created a situation in which the Virgin Islands is now forced to change or to perish.
Improving the quality of life for Virgin Islands residents
Providing a decent living wage for government employees This legislature is committed to pursuing all possible means of bring our government employees on step and making progress towards the payment of retroactive wage increases. For too long our public servants have suffered constant erosion in their standard of living as the cost of living has risen out of proportion to their incomes. While we seek to upgrade the skills of our workers and improve government productivity, we must all strive to compensate them fairly and provide all employees with a decent living wage with which to support their families. We pledge that any increases in revenues will be followed with principled attempts to improve the standard of living for government employees.
Providing affordable housing and homeownership opportunities
The two cornerstones of the effort to create and maintain a viable middle class in the Virgin Islands has been and continues to be the provision of economic opportunities and the provision of affordable housing. Our small landmass and the nature of the real estate market in the Virgin Islands dictate that at market prices, homeownership will continue to be beyond the reach of many Virgin Islands residents. As a result, the government must continue to act on behalf of its citizens to ensure that working people will have an opportunity to pursue the American dream of owning their own home. This legislature will be steadfast in its commitment to acquire land that can be made available to working people at affordable prices, and to provide incentives for private housing developers to make homes available to residents at affordable prices.
Agriculture and import-substitution
While growing the economy and attracting new businesses and investment is clearly a vital part of any plan for the revitalization of the Virgin Islands economy, it is clear that we must also strive to make the economy more integrated and to increase the circulation of money within the economy. Ensuring that a dollar circulates within the economy three times before leaving the Virgin Islands as opposed to one time has the same economic effect as bring two additional dollars into the economy. This phenomenon, called the multiplier effect by economists, is vital to creating a healthy economy and increasing the prosperity of Virgin Islands residents. One of the chief methods of doing this is by decreasing our reliance on exports through a program of import-substitution. To the extent that we can replace imported products for local consumption with locally-produced items, we will be able to develop healthy linkages between the various sectors of the economy.
One area in which we must pursue this path of development is in the production of food. While our geography and the conditions of the world market dictate that the possibilities of producing food for export are extremely limited, all economic data indicates that we are very capable of producing more of the food that we consume locally. For example, the development of a viable aquaculture industry, combined with increasing the production from natural fisheries, would decrease our reliance on imported seafood. One notes, for example, that all the shrimp consumed by the local public as well as by the hotels and restaurants are imported from abroad. While we clearly cannot produce shrimp cheaply enough to compete on the world market. We can produce shrimp and other seafood cheaply enough to provide a fresh quality product to local buyers at a price competitive with what we currently pay for shrimp. According to Dr. James Rakocy of the University of the Virgin Islands, the establishment of shrimp farms, particularly on St. Croix, can lead to the production of over 100,000 pounds of shrimp annually. Another fine example which was actually put into practice is the production of lettuce through hydroponics farming. While the lettuce produced cannot compete on the world market as an export product because of price, it does provide, for local consumption, a product that is unmatched in freshness and quality and which is cost-competitive due to the shipping costs and the middle men involved with imported lettuce. It is time for both the public and the private sector to pursue partnerships with the University of the Virgin Islands, which has taken the lead in aquaculture research, so that we can begin to actually produce aquacultural products on a large enough scale to satisfy a larger percentage of local demand.
Another example is in the area of poultry. The U.S. Virgin Islands Overall Economic Development Plan, produced in 1992 and subsequently ignored by V.I. policymakers, identifies poultry farming as one area that if stimulated, could substantially reduce our reliance on exports and develop a viable agricultural sector in the Virgin Islands. Towards that end I hope to see this legislature aggressively pursue a program of financial and technical assistance for producers of locally consumed products.
Tax reform Over the last three decades, the Virgin Islands has placed a substantial proportion of its economic eggs in the basket of tax incentives. Central to this entire program has been the idea that giving tax breaks to businesses will induce increased investment and therefore create more jobs, and that the government revenues that are sacrificed through tax incentives will be offset by the income tax revenues gained from the increased number of employees hired by the businesses receiving benefits. This economic approach, is fatally flawed as a development tool in the Virgin Islands of the 21st century for the following reasons:
· It assumes that manufacturing will be the dominant area of economic diversification for the Virgin Islands. . The paradigm which informs the IDC program is based on economic models of the the 1950's and '60's, as systemized in the writings of economist Arthur Lewis, in which the prescription for Third World economic development was to utilize their competitive advantages of mild year-round temperatures and cheap labor to make advances in export agriculture, manufacturing, and tourism. In addition, Virgin Islands and Puerto Rican policymakers reasoned correctly that in the geopolitical climate of that time, the rising tide of nationalism and revolutionary movements in the Third World made U.S. territories a safer climate for offshore U.S. investment. History shows us that these factors were indeed driving forces behind the explosion in manufacturing development which took place in Puerto Rico after World War II, and in the tourism boom experienced by the Virgin Islands in the years following the Cuban Revolution of 1959.
With the fall of the Berlin Wall and the advent of the microcomputer and information technology revolution, the economic and political conditions which led to such explosive development had changed sufficiently by the late 1980's as to raise serious questions about the applicability of the Lewis model to the Virgin Islands. By the early 90's, there could be no doubt, in the minds of thoughtful observers, that the Puerto Rican model was dead as far as the Virgin Islands is concerned.
In fact the global division of labor has created a situation wherein the nations of the Third World, with their lower wage scales, have a decisive competitive advantage in most types of manufacturing except for the most highly technological areas. The Virgin Islands is not poised to compete on either end of the manufacturing scale.
· Surveys of corporate executives consistently show that other factors, such as workforce productivity, a skilled labor pool, infrastructure, and quality of life are of equal or greater importance in investment decisions, particularly in today's knowledge-based economy in which people, as opposed to machines, are the chief crea tors of wealth in the wealthy countries.
· The tourism sector, which is the most logical beneficiary and the largest participant in the tax-incentive programs, is a relatively low-wage industry. As such, the type of economic activity most encouraged in the Virgin Islands has helped to foster the development of a low-skill, low-wage labor force.
This legislature must work closely with the Tax Reform Commission, which we anticipate will be revitalized by legislation passed in December, to create a rational policy of business taxation that will provide incentives for investment, growth and employment while ensuring that we maintain a healthy tax base. To that end, it is my belief that we must target our tax incentives at more knowledge-based industries that can provide more lucrative jobs and more opportunities for our young people.
It is commonly accepted that there are large numbers of outstanding taxes that the government has done a poor job of collecting. If the government is to maintain a healthy tax base without increasing the burden of taxation on our people, it is essential that the government make every effort to collect all taxes that are due to it. Towards this end, this legislature intends to pass legislation that would provide financial incentives for revenue collection agents so that private sector-type incentives can be utilized for the public good.
Government Reform
Clearly any program of revitalization in the Virgin Islands must address not only the fiscal crisis of the government but must also address the quality of service that we provide to the public. Towards that end, this legislature will pursue initiatives that will bring the government in line with the technological revolution that is bringing about fundamental change in the way that both the private and public sectors do business.
Bringing the Technological Revolution to Government
In a growing number of jurisdictions across the country and around the world, governments are providing more and more of their services on line. From filing tax returns to applying for business and drivers' licenses and unemployment benefits, governments are making it possible for its citizens to receive government services from the comfort of their homes or offices. This will bring about a number of benefits for the public, the government, and the economy:
· It will allow for faster and more efficient service to the public.
· It will bring about the long-awaited "one stop" process for the provision of a wide array of government services by eliminating or significantly reducing the need to go to two or three offices in order to obtain one license or permit.
· It will enable the government to do more with less by reducing the number of human inputs in government operations.
· It will allow the public easier, quicker, and more complete access to public records and information.
· It will foster the development of technological skills both within the government and among the public, thus increasing the skills of the V.I. workforce and enhancing our competitive position in the new global economy.
Worker training and retraining
If we have learned anything from the ongoing economic and technological revolution of the last decade, it is that people, not machines are the driving force behind the progress of any business or government entity. As such, it is unrealistic to expect that the simple upgrading of technological equipment will automatically bring about an improvement in the way the government does business. Therefore, any government reform must have, as an integral component, a program to upgrade the skills of government workers. This legislature will explore and pursue initiatives to mandate the ongoing training and retraining of workers in basic competencies necessary for survival in the knowledge-based economy and in the particular processes involved in the performance of their duties. This will result in a vast improvement in government performance and efficiency, and will further enhance the ability of Virgin Islands workers to compete in the new global economy. This type of development will contribute greatly to any efforts to attract new industries and high-paying jobs to the Virgin Islands.
Continued initiatives to downsize government
Given the success of the Voluntary Separation Incentive Program which according to estimates will save the government approximately $60 million over a five year period, we will continue to explore other innovative means to further downsize the government without impairing its ability to provide services or unnecessarily displacing employees. In this way, we hope to reduce government costs and at the same time encourage the migration of workers into private sector jobs and entrepreneurship.
Increasing government accountability
While we seek to improve the efficiency and productivity of government, it is vitally important to make the government accountable to its citizens and to reduce waste in government. This legislature will be aggressive in carrying out its oversight powers and responsibility to hold government agencies accountable for properly carrying out their functions and for properly expending public funds.
Improvements within the Legislature
Within the legislature itself, I intend to continue with the program of computerization that I began as President of the 21st Legislature. Within six months to a year, the text of all bills introduced in the Legislature will be available on our website, thus enabling the public to be fully informed of the issues that affect them. In addition, we will be introducing new processes that will allow more of the internal business of the body to be carried out on a paperless basis, thus improving the internal operations of the Legislature.
As announced at the press conference held last year by the incoming majority caucus, there will be additional initiatives undertaken to reduce legislative expenditures in areas relating to staffing, air travel, and ground transportation:
· During the 23rd Legislature, I introduced legislation, Bill No. 23-0040, to eliminate per diem payments to Senators for same day travel. This followed recommendations made by previous audits of legislative spending which showed that paying Senators $30 per day for same day travel represented an unacceptable expense. Unfortunately the Senate Committee on Finance, to whom the bill was assigned, allowed the bill languish in committee without taking action for over a year and a half so that the bill died in committee. One of the first acts of this legislature, along with ceasing the use of vehicles for senator's personal use, will be to eliminate these per diem payments for same day travel.
· The legislature's budget for this term will be $1 million less per year than the previous legislature. Unlike the previous legislature, which overspent its appropriation, we are committed to living within this budget and setting an example of doing more with less.