While commending the governor for taking a stand on some critical issues in this year’s State of the Territory address, many senators said Monday that they would have to take a hard look at some of the measures proposed — particularly plans to raise taxes and lay off 300 part-time and per-diem employees.
Many of the austerity measures would have to come through the Legislature before they can be implemented. And while no one disputed that the territory is, and will continue to be, in a fiscal crisis, several senators also said that there could room for a little "creative thinking" before putting anything drastic in effect.
"I think the speech was a bitter pill for Virgin Islanders to swallow during these difficult times, but maybe it was necessary," Senate President Ronald E. Russell said after the address. "I mean, if we don’t have the finances, the people need to know. I accept it, but it is our responsibility as a Legislature to maybe be more creative and take a closer look at some of these proposals. It’s still a work in progress in terms of how we cut the deficit and expenditures, but I prefer to look at raising revenues first and then balancing that out with the rest."
In his address Monday, Gov. John deJongh Jr. projected a $75 million budget shortfall for fiscal year 2011 and a $132 million deficit for FY 2012, and said it was time — after the government borrowed money and did what it could to avoid some of the more drastic cuts being implemented throughout governments on the mainland — to further tighten the belt.
Along with laying off approximately 300 per-diem and part-time employees, deJongh also proposed a 1 percent increase in gross receipts taxes, which some senators called an "oxymoron."
"The governor said he is for small businesses, but you can’t say that and then still raise the gross receipts tax," said Sen. Terrence "Positive" Nelson, who, along with the other members of the Next Generation Leadership team, said local merchants would be taking a hard hit if that bill were to pass.
"I think that the governor attempted to stress how serious the situation is," Nelson added. "However, I don’t believe that some of the measures he suggested are practical –in particular, the [tax] … and how much hardship that’s going to put on small businesses and the consumers."
DeJongh said he is also requesting an increase in hotel room tax, along with the implementation of a cell phone tax.
Nelson’s concerns were shared by majority members across the aisle, such as Sen. Patrick Simeon Sprauve, who said that any kind of tax increase or layoffs could result in an increase in crime.
"I know we’re strapped for cash – that’s why talking about these fiscal measures," he said. "But can the consumers afford it, will more businesses close—how are these things it really going to better the territory? This is what we need to ask ourselves, and we have to look at some more ways to bring in additional revenue."
Sen. Shawn-Michael Malone said officials need to show that the proposed cuts and tax hikes would make up for the shortfall.
"What’s lacking in the speech is a lot of details of how we’re going to get there ," he said. "We need to know what the savings and gains for the per-diem employees — we need to know whether it’s going to make up for the loss."
The senators’ financial concerns, however, were also tempered by praise for specific sections of the speech, such as deJongh’s plans for education or his proposals for consolidating a few key government agencies.
"I liked the portion about education," Russell said. "I thought his focus on education as a priority and sort of shifting the emphasis to teachers and families is a necessary measure, and it was a bright spot in the speech. And merging Health with Human Services — I think consolidating government agencies is an approach to cut the budget and make the government more efficient. I think these things figure into the agenda of the entire territory."
Chair of the Senate’s Health, Hospitals and Human Services Committee, Sprauve said that while plans to consolidate two of the government’s biggest departments is lofty, it should bring about better service. Operations at Health have been languishing for years, and maybe this proposal might improve the quality of services, he said.
For Sen. Craig W. Barshinger, one of the brighter spots in the speech was the governor’s plan to make the Waste Management Authority a cabinet-level department.
"I am delighted that he intends to pull the WMA back in," Barshinger said. "This clearly was an experiment that wasn’t successful — as an authority, Waste Management hasn’t been an effective use of funds. They got lost along the way, and the governor said tonight he’s going to help them get back on track."
Barshinger said overall, he was impressed by the speech, and was also "encouraged" that deJongh was making some bold moves.
"He said he’s going to deal with the government not as an entitlement program, but rather as a business," Barshinger said. "I’m really encouraged by that — he is making some broad moves that will put us on a course for social growth."
