Sept. 4, 2008 — Though the government still anticipates a $52 million cash shortfall for fiscal year 2008, revenue projections for FY 2009 have been bumped up from $867.3 million to $881 million, prompting requests for senators to approve some supplemental appropriations during the upcoming budget-markup process.
During Thursday's budget wrap up, members of the governor's financial team gave senators revenue updates for both fiscal years 2008 and 2009, and outlined their requests for additional funding. The budget wrap up signals the end of about three months of Finance Committee budget hearings. Senators will now dissect the proposed budget packet during two to three days of markup scheduled for next week, according to Finance Committee Chairman Sen. Terrence "Positive" Nelson.
The committee will then act on the budget during a hearing scheduled for Sept. 16. If the budget bills pass, they will move onto to the Senate's Rules and Judiciary Committee, then appear before the full Senate for a final vote.
At the end of May, Gov. John deJongh Jr. submitted an executive General Fund budget of $867.3 million, which he described as a spending plan aimed at getting the territory through some challenges that have put a strain on the government's finances. Those challenges include a downturn in the national economy and spikes in personnel, health care and energy costs. But updated projections have pushed the budget total up about $13.7 million, which can be attributed to an increase in real-property tax collections, along with a jump in contributions to the General Fund from other government funds.
Though no final decision has been made in a longstanding court case challenging the government's property-tax system, bills for FY 2006 have been sent out and are expected to add $20 million to the government's coffers. The bills reflect a newly implemented rate structure and recently reassessed property values. The government also plans on sending out bills for FY 2007 in December and bills for FY 2008 next May or June, according to Tax Assessor Roy L. Martin.
A hearing is scheduled for Monday at 9 a.m. in District Court to determine whether the government is in contempt of a court order barring the issuance of property-tax bills at anything other than the 1998 levels. During a Senate hearing last month, Attorney General Vincent Frazer cited two reasons he believes the government has the authority to issue the bills: the governor's approval of a new property-tax rate structure, and the repeal of a 1936 federal statute that prevented the V.I. government from taxing real property at different rates regardless of its classification or use.
Contributions from other government funds are also expected to increase during FY 2009, including an increase of $1 million from the Interest Revenue Fund, $4.6 million from the Insurance Guaranty Fund and an additional $1.2 million in contributions from the V.I. Lottery, according to Office of Management and Budget Director Debra Gottlieb.
The lottery's contribution was originally budgeted at about $900,000, but a closer look at the agency's resources has bumped that figure up to $2.1 million, said Valdamier Collens, executive assistant Finance commissioner, during Thursday's Senate meeting.
"We performed some additional due diligence by looking into Lottery's assets and resources and found that they had accumulated some cash reserves that could be used," Collens said. "So we think that for FY 2009, the agency is able to contribute at least $2.1 million to the General Fund.
Though the Insurance Guaranty Fund was recently tapped to pay down a portion of the government's outstanding retroactive wage debt, payments out of the fund have been stymied by the ongoing process of figuring out exactly how much is owed to whom.
"The cap on the Insurance Guaranty Fund is $50 million and the General Fund is still entitled to any of the money that builds up in excess of that cap," Gottlieb explained. "So we still have to make that contribution until we begin paying out for the retroactive wages."
The extra funding will give allow the government to better meet the needs of various government departments and agencies, particularly when it comes to covering utility, salary and health-insurance costs, Gottlieb said. A supplemental budget bill presented during Thursday's meeting includes additional appropriations of:
— $209,865 to the Office of the Adjutant General to take care of utility costs and salary adjustments for new and existing staff;
— $2.4 million to fund increases in the government's group health-insurance plan. (The funds primarily cover the costs laid out for emergency-room visits.);
— $1.5 million in the miscellaneous section of the budget to cover the government's share of health-insurance costs for retirees. (While the governor's initial budget factored in a five-percent increase in retiree's health-insurance premiums, the extra funding would eliminate the need for that increase, Gottlieb said.);
— $100,000 annually from the General Fund to the government's Animal Abuse Fund;
— $3 million to the Justice Department to fully fund a settlement between the government and H&O Foods;
— $3 million to the Justice Department to fund a settlement between the government and the Long Bay Coalition; and
— $150,000 to the V.I. Hospitals and Health Facilities Corp. for administrative expenses. (See "Hospitals Board Puts Carty, Najawicz on Leave.")
The amendment also calls for a $1 million increase in the FY 2009 contribution from the Interest Revenue Fund to the General Fund.
Senators also discussed several appropriation-transfer requests from various government departments and agencies, but did not make it through their entire list. The hearing will resume around 2 p.m. Friday.
Present during Thursday's meeting were Sens. Liston Davis, Juan Figueroa-Serville, Neville James, Nelson and James Weber III.
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.
