Majority Senators Justify Tax Increases at Town Hall

The crowd was attentive and polite Thursday night while majority senators justified recent tax increases at a town hall meeting on St. Croix, but when the audience began asking questions, it was clear voters had issues with not only taxes, but also with their retirement funds and austerity measures not being taken by the government to deal with the current fiscal crisis.

Richard Dorsey asks majority senators about recycling at Thursday’s town hall meeting (Susan Ellis photo).

According to majority leader, Sen. Neville James, the meeting was held to explain the passage Wednesday of the so-called sin tax that increases the taxes on tobacco, alcoholic drinks and sodas, establishes fees on timeshares and sets a floor of $360 for property taxes.

Bill 32-0005 was a version of Gov. Kenneth Mapp’s proposal to reduce the territory’s deficits of more than $100 million a year by raising funds to keep the government running and to reassure bond markets that recently refused to invest in the Virgin Islands.

“It’s okay to right-size the government but not put people on the streets,” James said as in defense of the Legislature’s favorable vote.

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Senators said they rationalized and agonized over the measures that kept them up at nights and by which they would be “judged harshly,” according to Sen. Marvin Blyden.

Sen. Sammuel Sanes said there were bigger issues to focus on such as rate increases by the V.I. Water and Power Authority, and Sen. Kurt Vialet pointed out that the Virgin Islands has never been denied financing by the bond market and has never been late on payments nor defaulted.

Vialet also said laying off 600 to 700 government employees to balance the budget would “destroy the Virgin Islands.”

To justify the property tax changes, Vialet said that there are 6,000 residents who pay less than $1,000 in property taxes. But one retiree said the new law would increase her property tax but she hasn’t ever experienced an increase in her retirement income.

Questions from the audience of around 70 spectators were pointed, direct and most were well researched. The comments covered the tax increases, legalizing marihuana and the failing Government Employees Retirement System. As the emotional context of the questions spiked, so did the grumbling and/or the applause.

Comments by Emanuela Perez left senators and the audience speechless for several seconds. Then the crowd enthusiastically applauded her suggestions that the senators include the public before they legislate tax increases.

“If you brought it to us, maybe we could have come up with something,” she said. “The real problem is you will continue to run the Legislature the same way. We’re ready to pay our share but you keep coming back to us.”

Senators seemed humbled. Blyden said, “You are correct,” and pointed out the new law is “a fluid document” that can be changed.

Sen. Novelle Francis Jr. said he met with stakeholders ahead of time and James said the bill was less than the governor originally requested.

Sen. Nereida “Nellie” Rivera-O’Reilly said she regretted not publicizing the bills earlier but hoped voters elect the senators who can make hard decisions.

“I don’t want to be sitting in the Legislature when the federal government comes in to take over,” she said.

The infamous Act 6905, passed in 2006 but not forgotten by voters, also came up. For Christmas that year, Legislators gave themselves, the governor and lieutenant governor hefty raises.

Taheema Edwards wanted to know if the 32nd Legislature would take $10,000 to $20,000 salary cuts to help reduce the debt crisis.

James said he would reduce his salary “as long as it was across the board.”

Senate President Myron Jackson said he would also take the cut, but Sen. Jean Forde stated emphatically he would not.

“If the job was $20,000 less, I would not run for it. It was a lateral move. I’m worth what I’m being paid,” Forde said.

The crowd murmured and one woman mumbled, “Most of us are not getting paid what we are worth.”

In response to questions about legalizing marijuana, Vialet pointed out it is a federally regulated substance and the states who have legalized recreational or medical cannabis had “more sophisticated regulations” that took five or six years to formulate. James said he doesn’t want to see it regulated unless the “children selling on the corner” are part of the process and not just “corporate America.”

Kye Martin had questions about GERS and $7 million annual funding from Diageo Rum.

James said the company had made one payment and still owes $42 million. He added that $100 million for GERS is part of the governor’s $247 million bond request.

Ermin Fahie also wanted to know what was being done to fund GERS and said the V.I. government hasn’t paid its contributions for two months.

Richard Dorsey wanted to know why funding for the V.I. Waste Management Authority and the recycling program were not line items in the government’s budget.

Vialet admitted the government can’t provide the funding it is supposed to and Blyden admitted, “Most of it is our fault.”

James invited the public to ask the question of the V.I Tourism Department at the next Legislative hearing.

Several senators criticized the business community who vehemently opposed the tax increases.

Forde said they should be as vocal about the financial problems of GERS as the sin taxes.

James added if the retirees have no income, they can’t spend their money in the private sector.

Attending the meeting were Blyden, Jackson, James, Vialet, Forde, Sanes, Francis, Rivera-O’Reilly, Sen. Brian Smith.

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4 COMMENTS

  1. They are upset at Business Owners who are more concerned about their businesses than GERS? Can that be accurate?
    The Public has no say in GERS. We don’t vote for their board and we are not privy to their executive sessions. We still don’t know how much they lost on Enron by violating their rule of not having more than a certain percentage invested in one entity. The public’s representation for GERS is the Legislature so don’t try and lay those issues off on the already overburdened business sector.
    Very soon the Senators will not have to worry about the business sector because it won’t be there.
    We can’t expect to stay open while hemorrhaging money and having an adversarial relationship with a Senate full of prior business owners,(a joke), a water and power utility bill costing thousands a month and increasing taxes with ever expanding roadblocks to even renewing a business license. To renew your license is now like running for office. You have to start 6 months before the renewal date, just to try and ensure you will have a license to operate the following year.
    A long time question I have and I hope it’s answered is; who and why was it felt businesses customers should pay twice as much for power as residential customers?
    Here’s another. When will the percentage of net-metering wattage allowed be raised or the formula changed; so these big solar panel farms no longer count as part of the percentage and deny private households the opportunity to take part in this program? These farms should be treated as licensed Power Producers and not part of the percentage of allowed net-metering!

  2. Pathetic move and not surprising considering the bloated legislature is only in business for themselves on the island. Their first reaction is to raise taxes on tourism and locals instead of actually trying to reduce their budget and cut waste (ie themselves).

    This is going to backfire and the governor will be back to the well to squeeze more out of everyone.

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