June 3, 2003 – The Senate threw down the gauntlet before the administration on Tuesday, with all 15 members telling the governor in a letter that there's got to be a quid pro quo if he expects the lawmakers to go along with his plan to borrow more money to keep the government afloat.
The deal: roll back the hefty pay raises granted to exempt and unclassified government workers in 2002 under the aegis of an executive order Gov. Charles W. Turnbull issued in November of 2001.
"We are respectfully requesting the immediate repeal of Sections 1, 2 and 3 of Executive Order No. 401-2002, dated Nov. 1, 2001, as both a sign and measure of the executive branch's willingness to work with the Legislature to reduce the operating cost of our government," the letter said.
And it set a deadline for his doing so: "no later than 10 a.m. on Thursday" — which is when the Senate Finance Committee is scheduled to convene to take up the six bills Turnbull submitted late on the night of May 20 for consideration at a special session he had called for May 22. At the session, the Senate voted to refer all of the bills to the Finance Committee.
At a press conference held Tuesday morning in the Legislative Conference Room on St. Croix, Senate President David Jones, flanked by 10 majority and minority bloc members, said "all have decided to put aside their differences" to try to resolve the financial crisis, a release issued later in the day stated.
Jones said that what comes out of the Finance Committee meeting on Thursday "will go to the [Senate] floor on Monday in regular session where the Senate will act."
He indicated, according to the release, that the session will focus on "the development of initiatives to relieve the stress on our financial conditions and, most importantly, cut costs and raise revenues."
Sen. Raymond "Usie" Richards, the Minority Caucus leader, expressed the minority's "continued willingness to work in unison to address our government's need for financial stability, growth and development."
What the senators want repealed
Section 1 of the November 2001 executive order repeals earlier orders issued in 1987, 1990, 1994 and 1999.
Section 2 caps the salary for commissioners, the Office of Management and Budget director, the Personnel director "and persons in similar position of authority as may be determined by the governor" at $97,000. It caps those for assistant commissioners and those in similar positions at $92,000, those for deputy commissioners and those in similar positions at $87,000 and those for division directors and administrators, coordinators and those in similar positions at $70,000.
Section 3 provides that each commissioner or agency head shall, in conjunction with the OMB director, certify that the implementation of the managerial salary schedule established in Section 2 "does not exceed the existing level of appropriations for the department, agency or office for which the commissioner or other head is responsible."
The senators have not called for repeal of the only other section of the executive order. It states that "retired employees whose salaries were adjusted pursuant to Executive Order No. 347-1994 and rescinded by Executive Order No. 350-1995 shall have such salary adjustment reinstated for annuity purposes only."
According to a list of proposed salary increases for hundreds of upper and mid-level exempt government employees dated May 28, 2002, and published by the Source last July, the executive order was expected to add a total of about $6.4 million per year to the government payroll. Most of the increases were in excess of 20 percent and many exceeded 30 percent.
The average proposed salary increase was to $49,923 from $41,540.
(For the complete list of all unclassified employees who were slated to receive increases under the order, with their then-existing and proposed salaries, go to the Source Data: section and type the word "exempt" into the search prompt at the bottom of the page. A total of 12 lists covering the various departments and agencies are posted.)
One of the immediate effects of the executive order was to provide for increasing the salaries of commissioners to $85,000 from $65,000. The governor argued that the measure was needed because some heads of departments were making less than some of those serving under them, thanks to step increases, negotiated pay scales and/or longevity.
Last December, Turnbull submitted a bill to the 24th Legislature similarly increasing the salaries of legislators to $85,000, while also increasing those of the lieutenant governor (to $115,000 from $75,000) and governor (to $135,000 from $80,000). The Senate passed the bill in its final, free-spending session, on Dec. 23. But Turnbull, in the face of public protests mounted at his second-term inaugural festivities on St. Thomas, St. John and, especially, St. Croix, vetoed his own measure. Thus, senators' salaries remain at $65,000.
What the adminstration wants approved
In the letter signed by all 15 senators on Tuesday, they noted that "as a body, we have allowed for and accepted the executive branch's reduction of the Legislature's allotment by 14 percent. The executive branch must now exhibit the same willingness to exercise immediate restraint by cutting spending. The most critical expenditure of this government is, in fact, our payroll cost."
On April 24, the governor announced that the territory was facing a deficit of $100 million for the fiscal year ending Sept. 30. That figure was quickly raised to $115, and in recent testimony before the Senate, members of Turnbull's financial term said it could reach $144 million with a District Court moratorium imposed May 12 on the collection of real property taxes until such time as the government complies with a years-old order to reform its property tax assessment and collection system.
Turnbull's six-bill package now before the Senate includes virtually no proposed spending cutbacks. It calls for the government to borrow another $235 million, to spend most of it on various projects including the building of an $80 million hotel on St. Croix that the government would own, and to raise numerous existing taxes and add new ones, virtually all of them aimed at the business sector. (See "Outline of bills submitted to special session".
"We must emphasize that the entire legislative body has agreed to continue the process of adequately analyzing your financial recovery proposals submitted during the special session and referred to the Finance Committee," the senators' Tuesday letter stated. "However, the Legislature finds it difficult to incur more financial debt by borrowing money without a significant reduction in payroll costs. The greatest concern for the body is the need to roll back pay increases issued prior to November 2002 in accordance with the executive orders."
The letter also noted that a 1999 Memorandum of Understanding between the V.I. government and the U.S. Interior Department "required your administration to implement specific budgetary reforms and to submit a balanced 2004 budget." However, it said, "Despite some successful reforms in FY 1999, several audits and financial reports have revealed that the administration has failed to comply with the terms of the MOU."
Publisher's note : Like the St. Croix 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.