April 26, 2009 — Gov. John deJongh Jr. warned a few dozen people attending the 40th annual League of Women Voters luncheon meeting Saturday to expect a $200 million budget shortfall in the fourth quarter of 2009.
Business closings, layoffs and reduced work hours have resulted in the deficit projection, he said, adding the budget was adjusted once in January, but that adjustment was then. The current economic reality calls for further modification. The $200 million figure is a guesstimate and could be less, deJongh said, but was clear he was adapting for planning purposes, and said his department heads were aware they were going to have to make further budget cuts. The shortfall will most likely have to be met by borrowing, deJongh said.
On an optimistic note, the governor said continuing private-sector capital projects, combined with close contact with cruise lines and airlines, had made the economic blows being felt all over the country softer in the territory.
"The cruise ship task force is in daily contact with the cruise lines," he said, pointing out that St. Thomas would maintain the normal ship calls for the coming season and St. Croix calls were expected to increase.
He also said diversification in the form of St. Croix's Research and Technology Park was helping to stabilize the local economy.
Williams and Punch, Robin Bay and Botany Bay, all resort projects on St. Croix and St. Thomas, are moving forward in one way or another, deJongh said, and the tax revenues brought in by Cruzan Rum, coupled with the fiscal boost that will come as the Diageo rum distillery comes on line, should steady the market as well.
"But understand," deJongh said, " the next few months are going to be rough, as season ends and we face the long summer months, when business usually slows down."
Norma Levin, LWV board member and former Finance Department official, asked when deJongh expected the property tax bills to catch up with the years they apply to. DeJongh quipped he'd be glad to know when he could send them out. The bills have been tied up in a court case for a couple of years. The last year that was billed was 2005.
DeJongh had been invited to talk about how the American Recovery and Reinvestment Act of 2009 would affect the territory and he summarized again that we are due to receive $280 million in formula driven funds and said there's another $500 million available in competitive grants available to government, private and non-government organizations.
He has charged the Public Finance Authority with monitoring the money along with the Finance Department, the lead agency tasked with disbursing and tracking the funds coming into the territory. PFA Director Julito Francis attended the luncheon meeting held at Palms Court Harbor View along with deJongh. Francis will oversee the Office of Economic Opportunity which has been established to assist businesses and organizations with acquiring grants, micro loans and other loans to keep them in business. The OEO will hire a project manager and possibly a program manager to assist. But deJongh was clear they would not be available to fill out applications — that would be up to the grantees or borrowers. But the manager would help applicants find their way through the maze of the process.
He also said a cadre of grant writers had been assembled to help the government though the same maze.
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