Nov. 20 2008 — Reducing government costs, investing in various capital improvement projects and building the territory's relationship with the federal government were the major topics of discussion at a cabinet meeting held this week by the governor and lieutenant governor.
Much emphasis was placed on the nation's current economic crisis, which has recently begun to affect the territory's fiscal year 2009 revenue projections. Government revenues are expected to fall $5.8 million short of the $843 million budget signed into law a few months ago by Gov. John deJongh Jr. (See "Government Revenues Expected to Drop $43.5 Million as Economy Slows").
"In light of the gap between the old and new revenue projections, it will be necessary to submit a re-aligned budget, while also taking needed steps towards reducing overall spending,” Office of Management and Budget Director Debra Gottlieb said during this week's meeting. Gottlieb, along with Personnel Director Kenneth Hermon, also underscored the importance of having departments and agencies monitor their spending patterns and keep up with a hiring freeze that went into effect in May, according to a Government House press release.
The government must also be "vigilant" about reducing its energy costs, said V.I. Energy Office Director Bevan Smith Jr.
“In order to get through this energy crisis, we must continue to implement measures that have a real and meaningful impact on our overall energy usage,” Smith said during the meeting. The government must reduce its energy costs by 20 percent in the next four years, and in order for that to happen, departments and agencies have to stick to the short and long-term strategies recently developed by the Energy Office, he added.
It's also important for the government to maintain its spending levels and build its services when the economy is in a recession, according to David Paul, the administration's financial advisor. During the meeting, Paul provided an update on the government's capital improvement program and outlined the need to move forward with a multi-year plan for capital improvement projects.
"It’s a critical time to invest in infrastructure projects," he said. "When the market is depressed, governments need to maintain spending and aggregate services to avoid a recession. We want to make sure that the capital program in place meets our needs for future years. In light of the (government's) current BBB investment-grade (credit) rating, the V.I. government continues to be in a strong position to communicate our overall profile to potential investors and fund critical projects."
The government's capital improvement plan, which would take the territory through 2014, also touches on a range of local infrastructure and economic development needs, according to the Government House news release. Senators will soon be meeting in Committee of the Whole to discuss a $400 million gross receipts tax bond issue recently sent down for approval. If senators give the government the green light to go the market, about $125 million in bonds would be issued within the next few months to begin a variety of these transportation, education and housing projects. (See "DeJongh Seeks $400 Million For Capital Projects".
Lieutenant Governor Gregory R. Francis also provided cabinet members with an update on the implementation of a state of the art geospatial information system in the territory, and highlighted how the system would benefit local first responder agencies. (See "Conference Salutes Technology for Storm Preps, Emergency Response").
But the recurring theme during this week's meeting was how local officials could work hand in hand with the nation's new president and democratic majority in Congress to build up the territory's profile. Representatives from the government's team in Washington D.C. updated deJongh and other officials about upcoming opportunities in the areas of health care, infrastructure building, transportation, homeland security and tax reform, according to the news release.
"This is a unique moment in time," deJongh said to cabinet members. "As we look forward to the inauguration of our next president, I encourage each of you to address the opportunities before you with continued diligence as we move towards building exciting new relationships in Washington, D.C. and elsewhere. And as we continue building a foundation upon which our future generations will stand, I look forward to the positive developments that will take place in each of your departments and agencies.”
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