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DeJongh Signs Gross Receipts Tax Increase, Vetoes Other Measures

Gov. John deJongh Jr. signed into law recent legislation increasing Gross Receipts taxes from 4.5 percent to 5 percent, along with measures pursuing a public pre-kindergarten program, tax breaks for music producers and a slew of other measures on Wednesday.

The tax increase will help the governor in negotiating with banking institutions to find "the next steps forward in handling our urgent fiscal issues," deJongh said in his letter to Senate President Ronald Russell, accompanying the signed bills.

"This process, already challenging due to national and local economic conditions, is now further complicated by the changed financial dynamics brought about by the recent announcement of the imminent closure of Hovensa," deJongh wrote.

DeJongh also signed a bill establishing a voluntary pre-kindergarten program for four-year-olds under the Department of Education, saying he has directed Education to begin putting together a plan and commending sponsor Sen. Alvin Williams for introducing and promoting the measure.

The governor also approved bills:

– to authorize the V.I. Public Finance Authority to raise or reprogram $650,000 worth of bond proceeds to purchase land behind Roy Lester Schneider Hospital for expanding the Lucinda Millin Home for the Aged. The funds would be used as matching funds for a $19.5 million federal affordable senior housing development and would facilitate federally funded rent subsidies for future low-income housing for senior tenants;

– providing local music and film producers with similar tax breaks to those offered through the Economic Development Commission and the University of the Virgin Islands Research and Technology Park, also directing the Department of Tourism to expand its Film Promotion Office to include a music-production division;

– defining the role of the Department of Licensing and Consumer Affairs’ role in determining the proper signage to be prominently placed by vendors of tobacco products in order to prevent sales of such products to those under the age of 18 years.

In zoning matters, deJongh signed a Coastal Zone Management Permit allowing St. Thomas’ Compass Point on the southeast side of Benner Bay to build two more docks with 46 new slips to its existing stock of 116 slips. The new permit also covers an existing 488-foot intake line, bringing it into legal compliance. It also allows installation of channel navigation. Work is expected to cost about $750,000 and take two years. The permit allows the marina to occupy 203,170 square feet of submerged land.

DeJongh also approved a spot rezoning and a use variance; the rezoning for Trans-Caribbean Diary Corp, rezoning (Remainder of Parcel No. 7-1 Estate St. Joseph and Rosendahl and Parcel No. 3A Estate Lovenlund, St. Thomas, from R-3, residential medium density, to B-2 Business secondary/neighborhood ) with variances for agriculture, crops, fruits, and other agricultural and dairy variances.

The company, which does business as St. Thomas Dairies and was established in 1963, has asked to change the zoning, and for the several variances, to make improvements that include opening a new convenience store, starting a farmers market and creating a sculpture garden.

The use variance was for Jay Knoepfel, providing a variance to the R-2, residential, low-density one and two family zoning of parcel nos. 19-2-101 and 102 Estate Smith Bay, Nos. 1, 2 and 3 East End Quarter, St. Thomas.

DeJongh line-item vetoed a variety of legislative measures, including a measure to set aside one roadside cleaning contract per year and one school repair contract per year for My Brother’s Workshop Inc. and for Ten Thousand Helpers of St. Croix, to make it easier for the two charities to offer paid, on-the-job training for young adults.

In his comments, deJongh praised both organizations, saying they "are as rich in material accomplishments as they are in the precious lives saved and redirected."

"While such organizations may deserve a preference in government contracting, it is unwise and improper to enact a law that grants such a preference to any named individual or organization,” deJongh said. “Rather the more judicious approach when establishing any such preference in the law is to describe the type of organization that shall qualify for such preferential treatment, regardless of its name."

He vetoed a measure authorizing a feasibility study on allowing private sector employees to participate in the Government Employees Retirement System, saying GERS has already determined doing so could terminate exempt status under the federal Employee Retirement Income Security Act of 1974 and the Pension Protection Act of 2006, affecting the system’s solvency.

DeJongh vetoed legislation requiring evidence of a good faith effort at mediation before a court can enter any judgment of foreclosure. DeJongh said comments from the local banking industry suggest it "may actually prompt federal banking regulators to declare one or more institutions insolvent. They may conclude that imposing the mediation process provided by this bill so diminishes the value of real property securing existing mortgages that the security for the loan is no longer sufficient.”

He also vetoed measures:
– allowing "at risk expectant mothers" to use handicapped parking spaces, saying it was well-intended but impractical without a definition of "at risk expectant mother," and funding for sign changes;

– a measure funding specific JROTC instructors, because the Department of Education has dealt with the funding issue;

– a measure enacting into law federal regulations regarding who qualifies for federal telephone assistance through the Lifeline program. Among other problems, deJongh said, "establishing income standards for program qualification, as this provision would do, may jeopardize the limited federal support that is provided."

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