With election day nearing, Gov. Kenneth Mapp approved legislation codifying increases to government employee base pay and rolling back a recently enacted floor on property taxes. He vetoed tax breaks for doctors and a bill re-appropriating funds away from Herbert Grigg Home for the Aged.
The pay raise bill increases the minimum government pay level to $27,040. On July 26, a week before the Aug. 4 Democratic Party Primary, Democratic Sens. Jean Forde, Kurt Vialet and Marvin Blyden issued a press release announcing legislation for a $5,000 increase to the base government salary, bringing it to $25,000 per year. The pay raises were to take effect in October, right before the election.
Four days later, Mapp, who is running for as an independent for a second term as governor, held a press conference trumpeting a slightly larger increase, to $27,040, and an array of other government pay raises. Those larger pay raises started taking effect sooner, at the beginning of August.
Aug. 27, the Finance Committee voted to send the Legislature’s pay raise bill out of committee after amending it to match Mapp’s larger increase. Mapp issued a press release the same day again trumpeting his larger package of pay increases.
During hearings on the pay raise, Budget Director Julio Rhymer said the territory had an unresolved, ongoing structural deficit of about $200 million per year. But he said federal and private spending on reconstruction after last year’s hurricanes, combined with hoped-for but uncertain revenues from a hoped-for but not guaranteed restart of the St. Croix oil refinery, could generate “about $170 million in revenue growth” in the short term. Reconstruction funding will stop in two to three years.
While Mapp approved a bill allowing greater use of property tax credits to reduce the tax obligations of homeowners given damages sustained by the 2017 hurricanes, but he urged the senators to adopt additional language limiting the use of credits to two years.
“Not providing a cut-off date for the reduction will result in a perpetual loss of revenues of approximating $1.7 million annually,” Mapp said in his letter to the Legislature. “I concur that seniors, veterans and those with disabilities should be excluded from the limitation of applying exemptions.”
The bill partially undoes legislation enacted last year to try to shore up the territory’s finances. In early 2017, the territory was facing ongoing structural deficits of around $170 million. Bond ratings agencies had downgraded the territory’s debt several times. In response to the emergency, the Legislature passed several unpopular measures, including putting a floor on property tax exemptions so that a property owner who would owed more than $360 before exemptions for a homestead, being a veteran, a senior citizen or person with a disability would still pay at least $360. Those with taxes below $360 without exemptions would still pay less than $360 – but could not reduce the tax further with exemptions.
In September, senators voted to cut the floor to $180.
Governor Mapp vetoed a bill about optometry because of two unrelated amendments. One would have eliminated gross receipts taxes for health care providers who receive Medicare and Medicaid reimbursements. Mapp said that the Legislature already cut those taxes in half, from 5 percent down to 2.5 percent, costing $3.5 million per year. Cutting them to zero would increase the loss to $7 million per year.
“I am baffled by the fact that a majority of the Members of the Legislature would think it prudent to once again decrease the revenues of the government on the one hand and then send me a bill to codify living wages to public employees on the other,” Mapp said.
He also said the loss of revenue could jeopardize the territory’s ability to access federal Community Disaster Loans to help bridge the territory’s ongoing budget shortfalls.
Mapp also objected to a section reducing additional staffing funds for the Herbert Grigg Home for the Aged from $500,000 to $350,000. That amendment diverts that funding to private health care providers in the territory.
“As you are aware, the care given to residents of the Herbert Grigg Home is critical and would be jeopardized by this reduction. The Department of Human Services has relied on these funds and is currently increasing staffing to accommodate 12 additional patients. Why pull the rug from under the department now and force it to deny families the help they need?” Mapp said.
Mapp approved several Coastal Zone Management permits he had previously sent down to the Legislature:
– Minor Coastal Zone Permit No. CZJ-29-16(W) for Low Key Watersports.
– Minor Coastal Zone Permit No. CZJ-14-16(W) to the Brent Squires Revocable Trust.
– Minor Coastal Zone Permit No. CMJ-2-14(W) to the Joseph John Marcus Trust.
– Minor Coastal Zone Permit No. CMJ-24-17(W) issued to Pillsbury Sound Land Company.