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Governor Approves Economic-Development Proposal, Trims Appropriations

June 10, 2008 — The governor signed into law Tuesday a tax-increment financing (TIF) proposal designed to stimulate economic development, but he line-item vetoed or cut in half several appropriations amendments tacked onto the bill during the last legislative session.
TIF legislation has long been used on the mainland to bring in economic-development opportunities and rehabilitate "blighted," economically stunted areas, members of Gov. John deJongh Jr.'s financial team have said at recent Senate hearings.
Under the proposal, a developer coming in with a project idea would first have to submit development plans to the Economic Development Authority and go through a public review and hearing process. If the development gets approved, the anticipated revenues generated from the project — such as property taxes or gross-receipts taxes expected to increase as a result of the development — would be pledged against bonds floated by the Public Finance Authority to fund associated infrastructure costs, such as roads, sidewalks and utility lines.
During a session held late last month, senators introduced a 30-page amendment in the nature of a substitute to the bill to tighten some loopholes in the law and make sure the Legislature has more oversight in the approval process. (See "Senate Approves Revised Version of Governor's Economic-Stimulus Plan.")
Two additional proposals submitted by the governor — dealing with the implementation of special-assessment financing, another method that could be used to pay off the debt service on the TIF bonds — will be considered at another Senate session scheduled for later this month.
The governor sent a letter Tuesday to Senate President Usie R. Richards saying he had approved the bill.
"I applaud the passage of this significant piece of legislation, and will work with the V.I. Economic Development Authority and the V.I. Public Finance Authority to implement this program," deJongh wrote. "The approval of this legislation puts the Virgin Islands on par with the 48 states, District of Columbia and the numerous local governments that utilize this vehicle to spur economic development."
The first project anticipated to benefit from the TIF program is targeted for St. Croix, he added.
About $480,000 in General Fund appropriations amendments were also added onto the bill during last month's Senate session. Citing his concerns about the limited amount of funds currently in the government's coffers, deJongh line-item vetoed three of the amendments, which appropriate $50,000 from the General Fund to the Department of Health to hire a dental hygienist for the dental clinic on St. John, $27,000 for Little League operations in both districts, and $73,800 to cover travel costs and expenses for the 2008 Little League inter-island regional tournament.
DeJongh also vetoed an amendment that prevents amphibian commercial boats, water taxis or water-tour operators from applying for Economic Development Commission tax benefits.
“Our waters are one of the Virgin Islands' most precious natural resources, and an integral part of our tourism product," the governor wrote in his letter to Richards. "There are challenges we face daily on the appropriate balance between preservation of these resources and their use as an integral component of our economic activity. Therefore, a blanket prohibition as exhibited in this legislation is counter-productive. This measure would create a disincentive to develop water-based businesses and, therefore, adversely impact our tourism product and entrepreneurial opportunities that could be available to so many of our young people."
DeJongh also partially funded appropriations to the Elrod Hendricks West Chartered Little League and the Clear Blue Sky Program. Senators had proposed that the little league program be given $150,000 to host the Latin American/Caribbean Senior League Tournament. DeJongh, however, approved a $75,000 appropriation. The governor also cut Clear Blue Sky's appropriation in half — from $100,000 to $50,000 — to fund community mental health programs, the purchase of medical supplies, materials and facilities maintenance.
The appropriations could be fully funded if additional revenues come in over the next few months, deJongh wrote.
DeJongh did sign into law amendments that:
— shift money within the personnel services section of the V.I. Police Department's budget to allow for retention bonuses and per diem expenses for inter-island travel for officers;
— appropriate $75,000 from the General Fund as a grant to Kid Scope for operating expenses;
— shift around money already appropriated for architectural and engineering plans for new schools throughout the territory to the Department of Education to paint all public schools in the territory; and
— give the governor 120 days to name two additional members to the Public Finance Authority board.
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June 10, 2008 -- The governor signed into law Tuesday a tax-increment financing (TIF) proposal designed to stimulate economic development, but he line-item vetoed or cut in half several appropriations amendments tacked onto the bill during the last legislative session.
TIF legislation has long been used on the mainland to bring in economic-development opportunities and rehabilitate "blighted," economically stunted areas, members of Gov. John deJongh Jr.'s financial team have said at recent Senate hearings.
Under the proposal, a developer coming in with a project idea would first have to submit development plans to the Economic Development Authority and go through a public review and hearing process. If the development gets approved, the anticipated revenues generated from the project -- such as property taxes or gross-receipts taxes expected to increase as a result of the development -- would be pledged against bonds floated by the Public Finance Authority to fund associated infrastructure costs, such as roads, sidewalks and utility lines.
During a session held late last month, senators introduced a 30-page amendment in the nature of a substitute to the bill to tighten some loopholes in the law and make sure the Legislature has more oversight in the approval process. (See "Senate Approves Revised Version of Governor's Economic-Stimulus Plan.")
Two additional proposals submitted by the governor -- dealing with the implementation of special-assessment financing, another method that could be used to pay off the debt service on the TIF bonds -- will be considered at another Senate session scheduled for later this month.
The governor sent a letter Tuesday to Senate President Usie R. Richards saying he had approved the bill.
"I applaud the passage of this significant piece of legislation, and will work with the V.I. Economic Development Authority and the V.I. Public Finance Authority to implement this program," deJongh wrote. "The approval of this legislation puts the Virgin Islands on par with the 48 states, District of Columbia and the numerous local governments that utilize this vehicle to spur economic development."
The first project anticipated to benefit from the TIF program is targeted for St. Croix, he added.
About $480,000 in General Fund appropriations amendments were also added onto the bill during last month's Senate session. Citing his concerns about the limited amount of funds currently in the government's coffers, deJongh line-item vetoed three of the amendments, which appropriate $50,000 from the General Fund to the Department of Health to hire a dental hygienist for the dental clinic on St. John, $27,000 for Little League operations in both districts, and $73,800 to cover travel costs and expenses for the 2008 Little League inter-island regional tournament.
DeJongh also vetoed an amendment that prevents amphibian commercial boats, water taxis or water-tour operators from applying for Economic Development Commission tax benefits.
“Our waters are one of the Virgin Islands' most precious natural resources, and an integral part of our tourism product," the governor wrote in his letter to Richards. "There are challenges we face daily on the appropriate balance between preservation of these resources and their use as an integral component of our economic activity. Therefore, a blanket prohibition as exhibited in this legislation is counter-productive. This measure would create a disincentive to develop water-based businesses and, therefore, adversely impact our tourism product and entrepreneurial opportunities that could be available to so many of our young people."
DeJongh also partially funded appropriations to the Elrod Hendricks West Chartered Little League and the Clear Blue Sky Program. Senators had proposed that the little league program be given $150,000 to host the Latin American/Caribbean Senior League Tournament. DeJongh, however, approved a $75,000 appropriation. The governor also cut Clear Blue Sky's appropriation in half -- from $100,000 to $50,000 -- to fund community mental health programs, the purchase of medical supplies, materials and facilities maintenance.
The appropriations could be fully funded if additional revenues come in over the next few months, deJongh wrote.
DeJongh did sign into law amendments that:
-- shift money within the personnel services section of the V.I. Police Department's budget to allow for retention bonuses and per diem expenses for inter-island travel for officers;
-- appropriate $75,000 from the General Fund as a grant to Kid Scope for operating expenses;
-- shift around money already appropriated for architectural and engineering plans for new schools throughout the territory to the Department of Education to paint all public schools in the territory; and
-- give the governor 120 days to name two additional members to the Public Finance Authority board.
Back Talk Share your reaction to this news with other Source readers. Please include headline, your name and city and state/country or island where you reside.