Again, as in many prior years, the GS&O Committee of the League of Women Voters of the Virgin Islands has reviewed, and reported on, the Executive Budget of the Virgin Islands which this year is close to 600 pages. Members of this committee have, in former professional lives, contributed to such documents for prior fiscal years.
From study and analysis, the League of Women Voters is acutely aware that the talk of serious financial problems in the government is not just talk but reality. The Fiscal Year 2010 financial plan includes, in addition to the usual sources of revenues, an anticipated increase in rum excise taxes and the overdue collection of 2006 and 2007 property taxes as well as those now due for 2008. The inclusion of these resources is dependent on both the general economy and the financial planning of the Virgin Islands’ property owners for what is generally an annual payment.
The planned use of borrowing from internal funds is only a finger in the dike. Such borrowing (the Funds to be utilized are not indicated) weakens the ability of a fund to meet the needs for which it was authorized and will ultimately require repayment.
The budget requires additional borrowing measures if it is to be balanced as required by law. Long term borrowing to cover short-term operating expenses conflicts with one of the basic tenets of financial management. To meet what would otherwise have been a shortfall, the Legislature has already enacted authorization to borrow $250 million.
As one element of cost containment to reduce the expense of operating the government, the proposed "Enabling Legislation" of the Fiscal Year 2010 budget document includes a reduction in paid holidays. This is not a popular option but a feasible exit from between a rock and a hard place.
The League suggests as well that a thorough examination of the government’s share of the Fringe Benefits (Social Security, retirement, and health insurance) will show that the government’s costs have, in the last 20 years, risen over 100% and are now approximately 30% of the government employees’ compensation package. The health insurance premium is tax-free for the recipient and the other benefits are tax-deferred until retirement. The League believes that raising the salary cap on employee and employer contributions to the retirement fund, while beneficial to a few will create another financial obligation of the government.
The League welcomed the creation of the Waste Management Authority with great expectations. Regrettably those expectations have not been met. After five years, the Authority is still not paying for itself, solid waste still proliferates, and there is no recycling plan.
The budget does not contain a reference to the government’s commitment to pay down the unfunded liability of $1.3 billion dollars to the V.I. Government Employees’ Retirement System for the benefit of its 18,000 members.
The League of Women Voters urges the 28th Legislature to fulfill their mandated responsibilities and address this proposed financial plan without rhetoric or political posturing but instead with a responsible, apolitical, open-minded approach.
Editor’s note: Abigail Cyntje is the president ot the League of Women Voters – Virgin Islands.