Nov. 15, 2008 — Gov. John deJongh Jr. submitted a bill Friday to authorize $400 million in new bond debt secured by gross receipts revenues to the Legislature, pointed at a range of capital projects in both districts.
"The turmoil that has gripped the worldwide financial markets, and the looming economic recession, are just now beginning to be felt across the territory," deJongh wrote Senate President Usie Richards, urging quick passage of the bill. "Over the coming months, we anticipate that the recession in the U.S. will negatively impact tourism activity, slow real estate development and sales, and adversely affect our construction industry and its participants. This slowdown will put pressure on local employment, and family incomes, as well as on governmental revenues."
In a Government House release, deJongh said that in this economic climate, it is essential the government step up and fill a critical void with strategically planned and implemented initiatives.
"Our goal is to move our capital investment program forward aggressively," he said. "At a time when private sector investment will be slowing, this program will support small business activity, continued employment and the flow through of resources to government coffers, by investing in infrastructure projects that are critical to our long-term economic future, to creating economic opportunity for all Virgin Islanders, and to improving the quality of life of our citizens."
Though the economy is slowing, this can be a good time to invest in public construction, as a slowing construction market means the territory will have more competition for its contracts, lowering costs.
DeJongh described a three-part plan.
"The first planning effort was the development of the six-year, $655 million Capital Improvement Program that addresses the critical infrastructure and capital investment needs of our community," he said. "This legislation funds more than 50 percent of those projects, with the balance to come largely from federal funding and existing resources. The second planning effort is the 10-year financial planning model that we have developed that allows us to project the cost of this capital funding initiative and to demonstrate the long-term affordability of the bonds to be issued. Finally, we are in the final stages of completing the Comprehensive Economic Development Strategy that will guide our economic development efforts into the next decade."
The governor is asking the Legislature to pass the bill quickly.
"The global capital markets are in a period of turmoil, and the municipal bond market has been in a state of flux since early September," he said. "Over the past two months, the issuance of long-term municipal bonds has been frozen for all but the highest rated governments, and overall bond issuance has declined by 75 percent or more on a weekly basis. Nonetheless, it is our objective to be prepared to raise our needed capital as the earliest opportunity that we have market access at reasonable pricing."
DeJongh proposes bonds be sought and spent on:
— $103.2 million on projects at 21 public schools, two new schools, and establishing a fund for core infrastructure needs at all the schools;
— $11.8 million to improve the territory's ability to respond to disasters and a state-of-the-art E911 system to help emergency management personnel respond quickly;
— $28.0 million for work at the Bureau of Corrections, police facilities and purchasing police boats;
— $60.9 million to build a central office on St. Croix for all the offices comprising the Office of the Lieutenant Governor, tourism and agriculture projects and renovation of downtown and historic properties;
— $100 million for solid waste and wastewater system projects to meet U.S. Environmental Protection Agency consent decrees and improve quality of life;
— $25.5 million in road, flood control and mass-transit system upgrades and;
— $11.5 million to buy land and beachfront needed for these and other capital projects.
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.
