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Senate Considers Creating New Government Body

The territory may see the creation of a new government panel of elected officials, college administrators and budget officials, tasked with creating a second economic and revenue forecast, alongside those produced by the government now, if a bill approved in committee Tuesday becomes law.

The bill, [30-0104] sponsored by Sens. Sammuel Sanes, Kenneth Gittens and Janette Millin Young, creates a "revenue projection conference" that must meet twice a year and produce revenue and economic forecasts. The new government body would hold hearings and gather information in order to create these forecasts. It would be composed of the director of the Office of Management and Budget, the commissioner of Finance, director of the Bureau of Internal Revenue, president of the University of the Virgin Islands, president of the V.I. Legislature and the Legislature’s post auditor.

Introducing the bill, Sanes said it creates a "think tank" or "task group" for economic data. "This is to help us put together, more or less, a better presentation in terms of our budget," he said.

Budget Director Debra Gottlieb testified in opposition to the bill, saying the conference would not add anything new or provide new information. It "just adds another level of complexity to the process by creating another committee with slightly different members to do the same thing," Gottlieb said.

"My participation on the proposed … conference will be duplicative of my role on the governor’s financial team and will further reduce my ability to efficiently perform my other duties," she said. In her testimony, Gottlieb also said the bill does not provide any funding for this new entity and its activities, and it does not require the Legislature to approve a budget that is based on the economic forecast the conference develops.

Sen. Myron Jackson asked if there was "some value to having an independent source of information" other than the governor’s financial team.

"They are just projections," Gottlieb said, adding the conference would have the same information the government produces now and the conference would only be estimating revenues and economic conditions, using the same information the government uses to make its projections now.

Before voting, Jackson said he wanted to see the bill amended to correct funding and other problems before it reached the Senate floor for a final vote.

Voting to send the bill on for further consideration in the Rules and Judiciary Committee were Jackson, Clarence Payne, Donald Cole and Clifford Graham. Sens. Judi Buckley, Terrence "Positive" Nelson and Nereida "Nellie" Rivera-O’Reilly were absent.

The committee also approved a bill, sponsored by O’Reilly, to authorize the government to use $300,000 in bond proceeds from a $7 million bond authorization approved by the Legislature in 2012 to purchase new police radios and improve tower communications in the territory. [30-0120]

V.I. Bureau of Information Technology Director Rueben Molloy testified that the measure would be of little use because BIT had recently begun creating a plan to increase tower communication coverage, and actually improving the network was expected to cost in the neighborhood of $2 million, he said.

"We recommend revisiting this bill when we have completed our data and requirements gathering and devise a plan with a more realistic budget. It is our belief that $300,000 is insufficient funding for this critical public safety project," Molloy said.

The section of the bill referring to new police radios was obsolete because the new police fleet already has new radios installed, he said.

Finance Commissioner Angel Dawson testified that the funding did not actually exist at present, because the government negotiated a $6.7 million bond issuance, not a $7 million one.

"We would have to go back to the financial institution to see if we can increase it," Dawson said. "I am not saying it cannot be done, but that the loan amount was actually $6.7 million, not $7 million," he said.

Voting yea were Buckley, Jackson, O’Reilly, Payne and Graham. Cole and Nelson were absent.

The committee held a bill sponsored by O’Reilly that would have removed the customs duty charged on goods shipped to the territory from within the U.S. Customs Zone to eliminate V.I. customs duties. The bill duplicates one held in committee in 2012. (See related links below)

By a quirk of history, related to the legal details of the U.S. purchase of the U.S. Virgin Islands in 1917, the territory is outside the U.S. Customs Zone, unlike Puerto Rico and other territories.

As a result, the territory is able to charge its own customs duties and, since 1994, the federal government has collected the funds on behalf of the territory, keeping a portion to cover its own costs and remitting the rest.

But in recent years, Customs and Border Control has been retaining nearly all the funds, O’Reilly said. With the federal government retaining all the funds, they are not benefitting the territory, while eliminating them would help to lower the costs of goods in the territory and help struggling businesses, she said.

Attorney General Vincent Frazer testified the revenues dwindled after the federal government reorganized Customs into Customs and Border Patrol, within the newly created Department of Homeland Security. He urged the committee to hold the bill, saying the government is currently negotiating with the federal government over the issue and that legislation may sour those talks and have unintended consequences on federal services.

"The goal of the governor is to correct this imbalance and still maintain the level of services the people have come to expect," Frazer said.

The committee voted to hold the bill while negotiations continue, with several senators urging Frazer to press the federal government and resolve the matter.

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