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HomeNewsArchivesV.I. FACING $100M DEFICIT FOR F.Y. 2003, TURNBULL SAYS

V.I. FACING $100M DEFICIT FOR F.Y. 2003, TURNBULL SAYS

April 24, 2003 – The V.I. government could face "deferred paydays and ultimately insolvency" with a projected deficit for this fiscal year in excess of $100 million, Gov. Charles W. Turnbull said in a statement on Thursday.
Turnbull, his financial management team, 12 members of the Legislature and Territorial Court Presiding Judge Maria Cabret met Thursday to talk about the "financial crisis."
Since the 2003 Fiscal Year began last Oct. 1, expenditures have exceeded revenues every month but January, Turnbull told the Senate members and Cabret. "The government's cash-flow difficulties are further compounded by expenditures which are increasing at a greater rate than the revenues collected," he said in the statement, broadcast on evening newscasts.
"If we continue at this rate," Turnbull's statement said, "the government will not have sufficient cash in the month of June to meet all of its necessary obligations."
The governor said there was discussion at Thursday's meeting of "reduction of personnel services, including a possible 36-hour work week."
A "cash-flow problem" was something the governor mentioned in his State of the Territory address in January, when he said that corrective action was necessary to "avoid more serious financial consequences."
"It is important to understand that a cash-flow problem is not the same as a full-blown fiscal crisis, such as the government experienced in 1999, when my administration first assumed office," Turnbull said in the January address. "We are not facing bankruptcy or payless paydays or a federal takeover."
But that assessment has apparently changed. Thursday's statement said that "if we continue at this rate, the government will not have sufficient cash in the month of June to meet all of its necessary obligations."
The announcement was markedly less optimistic than Turnbull's January speech, in which he lauded his administration's "reversal" of "our financial course," and pointed to recently completed governmental audits through 2001.
The audit for that year, he said, showed a General Fund surplus of about $35 million. "And while we anticipate that the uncompleted Fiscal Year 2002 audit will show some slippage, it is undeniable that we are making steady financial progress …" he said.
A big part of the appearance of "steady financial progress" was a $100 million "windfall" in tax collections for 2001, which, ironically, is the same figure assigned to the current deficit.
Turnbull was adamant in his State of the Territory speech that the "windfall" was not a one-time occurrence, but that "disciplined tax-collection efforts" and a "reinvigorated" Economic Development Commission program had "built" the money into the revenue base. He went on to compare the Virgin Islands' deficit with those of California and New York and said that "our fiscal problems are not as severe."
Thursday's statement also compared the territory with other U.S. jurisdictions and said many of them are "facing the very same situations" and have begun to implement cost-cutting initiatives.
Such initiatives in the territory, it said, include reductions in travel, use of government vehicles, overtime costs, and professional and personal service contracts; elimination of private telephone lines and "most cellular phones"; and control of expenditures at department levels.
To bring in more revenues, Turnbull said, the government must follow through on a number of capital projects, including the Crown Bay dock expansion, the Enighed Pond and Red Hook commercial port projects, the Yacht Haven Hotel and Marina redevelopment, the Christiansted Boardwalk expansion, the Gallows Bay port dredging, and construction of the Christiansted Bypass.
"It was agreed upon that all three branches of government must work in unison to eliminate the deficit as well as to present a plan that will meet the immediate needs of the people of the Virgin Islands," the statement said.
The Legislature last week in its first full working session approved more than $11 million in additional appropriations for this fiscal year. It appears that $3 million of that amount is moot, however, as the Port Authority board on Wednesday turned down the interest-free loan in that amount that senators approved to allow VIPA to reconsider the 25 percent increase in airport fees implemented in February.

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April 24, 2003 - The V.I. government could face "deferred paydays and ultimately insolvency" with a projected deficit for this fiscal year in excess of $100 million, Gov. Charles W. Turnbull said in a statement on Thursday.
Turnbull, his financial management team, 12 members of the Legislature and Territorial Court Presiding Judge Maria Cabret met Thursday to talk about the "financial crisis."
Since the 2003 Fiscal Year began last Oct. 1, expenditures have exceeded revenues every month but January, Turnbull told the Senate members and Cabret. "The government's cash-flow difficulties are further compounded by expenditures which are increasing at a greater rate than the revenues collected," he said in the statement, broadcast on evening newscasts.
"If we continue at this rate," Turnbull's statement said, "the government will not have sufficient cash in the month of June to meet all of its necessary obligations."
The governor said there was discussion at Thursday's meeting of "reduction of personnel services, including a possible 36-hour work week."
A "cash-flow problem" was something the governor mentioned in his State of the Territory address in January, when he said that corrective action was necessary to "avoid more serious financial consequences."
"It is important to understand that a cash-flow problem is not the same as a full-blown fiscal crisis, such as the government experienced in 1999, when my administration first assumed office," Turnbull said in the January address. "We are not facing bankruptcy or payless paydays or a federal takeover."
But that assessment has apparently changed. Thursday's statement said that "if we continue at this rate, the government will not have sufficient cash in the month of June to meet all of its necessary obligations."
The announcement was markedly less optimistic than Turnbull's January speech, in which he lauded his administration's "reversal" of "our financial course," and pointed to recently completed governmental audits through 2001.
The audit for that year, he said, showed a General Fund surplus of about $35 million. "And while we anticipate that the uncompleted Fiscal Year 2002 audit will show some slippage, it is undeniable that we are making steady financial progress ..." he said.
A big part of the appearance of "steady financial progress" was a $100 million "windfall" in tax collections for 2001, which, ironically, is the same figure assigned to the current deficit.
Turnbull was adamant in his State of the Territory speech that the "windfall" was not a one-time occurrence, but that "disciplined tax-collection efforts" and a "reinvigorated" Economic Development Commission program had "built" the money into the revenue base. He went on to compare the Virgin Islands' deficit with those of California and New York and said that "our fiscal problems are not as severe."
Thursday's statement also compared the territory with other U.S. jurisdictions and said many of them are "facing the very same situations" and have begun to implement cost-cutting initiatives.
Such initiatives in the territory, it said, include reductions in travel, use of government vehicles, overtime costs, and professional and personal service contracts; elimination of private telephone lines and "most cellular phones"; and control of expenditures at department levels.
To bring in more revenues, Turnbull said, the government must follow through on a number of capital projects, including the Crown Bay dock expansion, the Enighed Pond and Red Hook commercial port projects, the Yacht Haven Hotel and Marina redevelopment, the Christiansted Boardwalk expansion, the Gallows Bay port dredging, and construction of the Christiansted Bypass.
"It was agreed upon that all three branches of government must work in unison to eliminate the deficit as well as to present a plan that will meet the immediate needs of the people of the Virgin Islands," the statement said.
The Legislature last week in its first full working session approved more than $11 million in additional appropriations for this fiscal year. It appears that $3 million of that amount is moot, however, as the Port Authority board on Wednesday turned down the interest-free loan in that amount that senators approved to allow VIPA to reconsider the 25 percent increase in airport fees implemented in February.

Publisher's note : Like the St. Thomas Source now? Find out how you can love us twice as much -- and show your support for the islands' free and independent news voice ... click here.