Nov. 18, 2003 – After a multitude of weather problems and other delays, the Senate majority's fiscal year 2004 budget on Tuesday morning finally reached the Rules Committee. Sen. Roosevelt David, the chair, said it would be out of the committee before the end of the day.
But that was not to be. The proceedings ran into an unexplained speed bump Tuesday afternoon, throwing the meeting into recess until 2 p.m. Wednesday.
Late in the afternoon, Nathan Simmonds, the governor's chief fiscal officer, arrived at the Senate chambers, where he sat for a bit before disappearing with Senate President David Jones. Sen. Celestino A. White Sr. took the occasion to remark: "I don't think the governor is going to back this budget."
Shortly after Jones and Simmonds left the chambers, David announced the recess.
Objection to Human Services cuts
A little earlier, Sen. Carlton Dowe, the Rules Committee's lone minority member, had raised vehement objections to the majority budget's $2.8 million cut in the Human Services Department budget, after which the meeting took a decidedly different turn. Dowe got his colleagues' attention as he read from a letter that Human Services Commissioner Sedonie Halbert had written last Friday to Gov. Charles W. Turnbull and to Sen. Adlah "Foncie" Donastorg, the Finance Committee chair.
Halbert wrote: "This is a most urgent letter expressing my grave concern over the Legislature's FY 2004 budget recommendation … a cut of this magnitude will have a serious impact on the most vulnerable of the community; the elderly, children and persons with disabilities."
She said nursing services at the Lucinda Millin and Whim Gardens homes for the aged would be cut, leaving 170 elderly residents without nursing care. Also, she said, funding to contract with off-island facilities to house adults with severe disabilities and emotional disturbances would be significantly reduced, and as a result the department would be unable to respond to court orders and would thus be found in contempt of court.
Halbert also wrote to David on Monday about concerns she said David had expressed about "vacant positions" in the Human Services Department. The majority had based the cut in the department's appropriation on such supposed vacancies.
About 22 of the vacancies are local matching positions for the federal food stamp, Head Start and vocational rehabilitation programs, Halbert said. She outlined the needs of each program and the reasons the positions are vacant, citing the "stressful" nature of the jobs and the consequent high rate — 30 per cent — of annual staff turnover. She said the department is "desperately trying to increase the level of staff retention by upgrading these positions."
Dowe motioned to take a 15-minute recess to draft an amendment returning the funding the majority had taken from the department, but he did not get a second, so the motion failed.
Majority Sens. Lorraine Berry and Louis Hill expressed surprise and concern over the letters. Berry, who had earlier expressed misgivings about some proposals in the budget, said: "I'm very concerned about this budget when we have Human Services local match positions for food stamps, Head Start and vocational rehabilitation being removed. I think we have to put the funding back in the budget and admit we erred."
David, however, said the budget is still "a work in progress" and that "we will address that [matter]. We are very aware of what's going on. That's why we have all these meetings. In the next couple days, we will have a real budget with modifications."
Dowe subsequently went to the legal counsel's office to draft an amendment returning the funding to Human Services, but he discovered he had been pre-empted by Hill, who had already done so.
Dowe also voiced objections to the reductions in funding for the Public Works Department, Office of Veterans Affairs, and Board of Education. For an overview of the executive branch department and agency appropriations approved by the Finance Committee, see "Budget appropriations approved by Finance".
Property-tax double billing plan doubted
Dowe also questioned the majority's property tax proposal included in the Omnibus Bill. The bill proposes to borrow up to $70 million. Of that figure, $40 million would be in the form of a tax anticipation note which the governor would secure from a local bank to be repaid by a projected $40 million in property taxes to be collected in fiscal year 2004.
The other $30 million would be a loan backed by the Insurance Guaranty Fund, always a hot button issue. Gov. Charles W. Turnbull has in the past chided the Legislature and vetoed legislation it passed utilizing the fund. However, in an abrupt reversal, he himself called in his proposed FY 2004 budget for appropriating $8 million from the Insurance Guaranty Fund to the General Fund to help balance the budget.
These measures are the majority's alternatives to what it considers the governor's more onerous proposals including a cutback to a 36-hour week, an increase in the gross receipts tax and a 10 percent personal income tax surcharge.
David and Jones defended the property tax measure. After objections by Dowe, David said the proposal would be explained further as it moved through committee. The measure first came to public attention when the minority bloc released information about it at a Finance Committee meeting last week.
The proposal states that 2003 property tax bills are due next May 30, while 2004 tax bills are due next Sept. 30; however the 2004 bills do not become delinquent until Sept. 30, 2005, because of a one-year grace period.
Dowe says this will not sit well with people with bank mortgages. "Once you have a mortgage, the bank escrows your account for property taxes," he said. "A mortgage is based on one payment. The bank will make sure to escrow the two of them, and one bank said it could increase the escrow in your account by as much as $95."
Dowe raised this point: "Why go after the people who are paying their taxes and make them pay twice in one year, when you have all these people who have been delinquent all along?" He said an "modest estimate" puts $40 million on the street in delinquent taxes. Sen. Emmett Hansen II in past Senate meetings has said the figure is close to $80 million or $100 million.
Jones defended the property-tax proposal and said the revenues would go to create a "rainy day" fund, something he said the government has never had. "The collections will be put in a lockbox" to repay the note(s), he said. "Then the anticipated revenue stream will be used for an Economic Stabilization Fund in the amount of $16.6 million."
Despite having said she would go along with the majority, Berry expressed serious concerns throughout Tuesday's meeting about the overall budget. She cautioned her colleagues that its revenue-generating measures are contingent on the administration carrying out its policies. "Our initiatives are in the hands of the executive branch," she said. "We can't make them do it. We can ask the governor to keep an open mind, and not listen to certain of his advisers, on or off the payroll."
Crossover call for a control board
Berry added: "I hope and pray we don't get another consent decree" from the U.S. Environmental Protection Agency. And, lamenting the lack of cruise ships visiting St. Croix, she said: "We need people doing their job. We have to show the administration we need accounting."
Her remarks followed a diatribe of an unusual nature from White. Long an adversary of Berry's, White in recent Senate meetings has taken to defending her honor even when it needed no defending, a tack that has elicited looks askan
ce and indulgent smiles on her part.
On Tuesday, White called for putting in place what he called "Senators Berry's and White's Financial Control Board." White, who regularly expresses his scorn for the majority's budget, told his colleagues: "You are giving your hard work you say you did to someone else to administer it. That's why a mechanism should be put in place to control it. That's why the senior senator Berry and I continue to talk about a control board."
Berry, who had legislation drafted early in the year to create a financial control board for the territorial government, said on Tuesday that "it's still an option, but I have no support in my group."
White and Dowe instantly assured her of their support.
Jones made no bones about his opposition to the board. "I am not prepared to get on the bandwagon yet," he said. "The Legislature has control. We need to re-look the manner in which we exercise our oversight before we consider a control board."
Action on biggest bills still to come
The Rules Committee passed all of the majority budget bills on Tuesday except for the following five, which it held for consideration when the committee reconvenes at 2 p.m. Wednesday:
No. 25-0126 — to implement a surtax on hotel rooms and time-share occupancy.
No. 25-0130 – to appropriate $1.7 million from the Business and Commercial Properties Revolving Fund to the government of the Virgin Islands for operating expenses.
No. 25-0120 — to appropriate funds for the FY 2004 operations of the V.I. government.
No. 25-0015 – to establish the V.I. Tourism Authority, and for other purposes.
No. 25-0030 – the 2004 Omnibus Authorization Act.
Rules is scheduled to complete its work on the FY 2004 budget Wednesday, and the full Senate is to take it up on Thursday and Friday.
Meantime, to address any confusion over the figures in the executive budget, the legislative budget and/or the Omnibus Bill, the Senate majority has called a press conference for 10 a.m. Wednesday at the Education Department teleconferencing center on St. Thomas and the Curriculum Center in Kingshill on St. Croix. The majority senators will "discuss and field questions about the FY 2004 budget," Jones announced on Tuesday.
All seven Rules Committee members — Sen. Berry, Douglas Canton, David, Dowe, Hill, Jones and Ronald Russell — attended Tuesday's meeting. Also present were Sens. Shawn-Michael Malone and White, who are not members of the committee.
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