Dear Editor,
Mr. Renny Roker made a statement in your Open-forum section that required clarification. He stated in "Racial Problems Also a Money and Tax Problem", "I spoke to our senator-at-large about the situation in St. John and received the typical, 'great idea, I'll look into that immediately,' then nothing, as usual." As the territory's present senator at large, I wanted to clarify that Mr. Roker must have been referring to the previous senator at large, for it was not I.
His commentary about the sources of tension on St. John is insightful. I'd like to comment on them and add my own perspective. The biggest problem facing St. John today is the fact that an upward-spiraling cycle of land speculation is driving land prices up into the stratosphere. Already, land prices and home prices are beyond the reach of a St. John youth who is reaching adulthood and wants to stay on his or her home island. This is a tragedy.
On January 10, I submitted a drafting request for a bill to abolish the land tax as it stands now, and replace it with an improvement tax. This bill would ensure that a St. John resident would never be taxed out of his or her home due to rising land taxes. This can happen in many ways, one of which is that a neighbor can build a huge house or a hotel, thereby driving up all land taxes in the area. This is fundamentally unfair: Why should a person be taxed based on what their neighbor does? We should have a tax system that allows each person to accurately predict how much tax burden they will incur.
The beauty of the improvement tax over the land tax is that it will slow the cycle of rampant land speculation. When land is not taxed, it is easy to hold for future generations. Land-rich but cash- poor families on St. John will no longer to be forced to sell off land to developers in order to pay land taxes.
Abolishing the land tax and replacing it with the improvement tax is a big move, one that is justified due to the unique problems the Virgin Islands and particularly St. John are facing. In addition, it will help St. Croix and St. Thomas farmers, as agricultural land will no be taxed.
This can all be accomplished locally, in the VI Senate. There is also a congressional route to a solution. Delegate Donna Christensen has introduced congressional legislation to repeal the crippling 1936 law that formed the basis of the present tax crisis. If she is successful, we have a whole range of options available to us. It would be up to the Legislature, with the input of the public, to choose. One option would be to tax land at a very low rate, and to tax improvements at a higher rate. This makes good sense, as land doesn't burden our infrastructure, whereas habitations do. Improvements indicate a burden to the infrastructure, as well as an ability to afford an improvement tax.
Additional legislation that I have in process will require that developers who build more than seven homes must offer one unit of affordable housing for each seven that they build. Not only will this create more affordable housing, it will encourage neighborhoods that are economically and ethnically diverse.
These are just two ways that we can deal with the sources of tension. As your Senator At Large, I hope to continue to hear public input, comments, and suggestions on how to deal with these serious issues confronting the Virgin Islands.
I appreciated Mr. Roker's article because he saw past the superficial appearances that some are calling racial tension and identified the root sources of tension on St. John.
Craig Barshinger
Senator At Large
