The V.I. government has to postpone scheduled salary increases and delay union negotiations because of dire economic times and large budget deficits, Chief Labor Negotiator Valdemar Hill told government union representatives Tuesday at a meeting convened by the V.I. Office of Collective Bargaining.
“This was a difficult decision, one that was not made lightly,” said Hill in a Government House statement. "In fact, this is the only responsible decision in light of projected revenue shortfalls, much higher than once anticipated."
Right now, the government projects a fiscal year 2011 budget deficit of more than $82.5 million; and more than $106 million for FY 2012, Hill said.
The severity of these deficits made it necessary to cease negotiations because of the uncertainty over what the government would actually be able to commit to, according to Hill.
“If the Virgin Islands is to weather the current global economic downturn that has created deep budget shortfalls in government coffers across the Territories and the United States, everyone, including government employees, must be willing to sacrifice for the greater good of the U.S. Virgin Islands,” he said.
In the statement, Hill emphasized the territory is not unique in its financial woes, nor alone in implementing difficult measures to get through the crisis. Across the country, states have frozen or cut salaries, benefits and pensions for public employees. Puerto Rico has dismissed and sent home tens of thousands of employees, he said.
And in the territory, private companies have been laying off workers or reducing pay and benefits, he said.
“In this time of worldwide economic uncertainty and decreased revenues, it is simply unrealistic and unfair to increase salaries across the government while the prospect of losing their jobs still looms for many public employees," he said
In late December, the V.I. Office of Management and Budget sent Gov. John deJongh Jr. a letter outlining the reasons for the decision to postpone raises, according to Government House.
In that letter, OMB Director Debra Gottlieb said the pending salary increases were currently estimated to cost between $36 million and $41 million and she recommended the pay raise postponement,according to Government House.
“We are living through one of the greatest economic recessions our country, and this territory, have ever experienced. Revenues do not support scheduled raises—this is the economic reality we must confront and address to ensure our schools stay open, we meet the challenges of health care reform, and we protect our community by providing critical public safety and social services,” Gottlieb said in the same Government House statement.
