Gov. Kenneth Mapp signed legislation to authorize the Public Finance Authority to borrow $247 million to keep the government running for the rest of the year. The same bill included a "statutory lien" on gross receipts tax revenues and federal alcohol excise tax revenues remitted to the territory, aimed at increasing the security for lenders.
Senators amended it during a special session Nov. 3, to specifically allocate $15 million toward unpaid tax refunds. Another amendment requires the territory’s two hospitals use at least 30 percent of $25 million allotted to them to pay past due utility bills.
The statutory liens put V.I. gross receipts tax revenues and remitted federal alcohol tax revenues into the hands of a third party trustee, who will pay bond holders first, before turning the funds over to the USVI. Bond ratings agencies and potential lenders have said the measure will improve the territory’s credit rating, making it easier and less expensive to borrow than otherwise. (See Related Links below)
Once the bonds are sold, they will allow the V.I. government "to avoid any interruption in the delivery of essential public services, including meeting our payroll, paying vendors and providing tax refunds," according to a statement from Government House.
It provides about $116 million in working capital for both Fiscal Years 2017 and 2018; $100 million to the Government Employees Retirement System; $25 million divided equally between the territory’s two hospitals; and $6 million for WMA..
“As we continue to work our way through the quagmire of financial challenges, my administration is optimistic that we will in fact find ourselves in a better financial position as a result of sound financial management of our funds,” Mapp said in a letter thanking the V.I. Legislature for approving the bill.