In a press release sent during a lengthy Senate budget session on Tuesday, Gov. Albert Bryan Jr. urged the Legislature to expand the government’s $100 million line of credit to $150 million or approve a separate $50 million line to address pressing financial obligations, while lawmakers called for caution.
“This request is more imperative than ever,” Bryan wrote, referencing the federal government’s extension of the corporate income tax filing deadline from October 2024 to February 2025. This delay, he explained in his release, will significantly impact revenue collections and strain cash flow, making it difficult for the government to meet obligations such as income tax refunds and vendor payments.
After Tuesday’s Senate hearing, where the administration’s financial team presented revised projections for the upcoming fiscal year, Senate President Novelle Francis acknowledged the seriousness of the situation but stressed that any decision must be made carefully. “We need to take care of vendors that need to be paid,” Francis said. “We can’t continue to see the people suffer.”
In a call with the Source, Francis said based on Tuesday’s testimony, the government is dealing with an approximate $90 million budget shortfall and $54 million in outstanding vendor payments. Though there could be some federal American Recovery Plan Act dollars that could be used to plug the hole, without additional financial relief, the issues will persist as the fiscal year ends in just 27 days, he explained.
Repeated calls and emails to Government House to get a better handle on the numbers have not yet been answered.
Meanwhile, Francis said the Senate would soon decide whether to modify the existing $100 million line of credit or authorize a new $50 million line for operational expenses. However, he emphasized the need for a clear repayment plan and strong oversight. “The Achilles heel here is that we’re already at a deficit,” Francis said, warning that without a funding source to repay the debt, expanding the credit line could worsen the government’s financial troubles.
Sen. Alma Francis-Heyliger, who authored legislation to keep the $100 million line of credit focused on disaster recovery, expressed concern about diverting funds to cover general expenses. “The problem I’m having is that the governor wanted to use part of the credit for government operations,” she said in a call Tuesday night. She also warned that using borrowed funds without a clear repayment plan is risky. “Government operations are just expending funds, and you don’t know how to put it back,” she said.
Francis-Heyliger, who has called for maintaining the original purpose of the credit line, highlighted the need to secure matching funds for FEMA projects and rebuild vital infrastructure. The administration has already used and repaid $45 million from the line of credit for the acquisition of propane terminal infrastructure from VITOL on behalf of the Virgin Islands Water and Power Authority (WAPA), but $87.2 million still remains, based on testimony from Tuesday’s hearing.
While Francis-Heyliger said she remains firm in her opposition to using the current line of credit for operational costs, she, too, said she was willing to collaborate with Francis on the new request. “I’m not backing down from not allowing them to pillage the line of credit,” she said, but added, “If my colleagues choose to consider expanding the existing line of credit or authorizing a new one, I am sure we will all look at it and make a concerted decision.”
Both senators underscored the importance of maintaining the government’s recovery efforts. “We have people still without their roofs, and buildings and projects that need to be completed,” Francis-Heyliger said, stressing that securing matching funds is critical to unlocking federal dollars for these projects.
Meanwhile, during Tuesday’s hearing, some lawmakers also called for the government to explore cost-saving, or austerity, measures – among them, a proposal to stop funding employees’ annual leave while they are on vacation, which could potentially reduce government expenses. “The leave still accrues when they’re on vacation or not working,” Francis-Heyliger said, presenting it as one possible solution.
The Legislature now faces the decision of whether to grant the administration more borrowing power or maintain its current financial posture. As Francis noted, “Whatever decision is made, it will come with tons of stipulations,” including a clear repayment strategy and detailed plans for how the funds will be used.
In his release, Bryan stressed the urgency of the situation, calling for swift action to prevent further financial strain. “Our vendors and residents are depending on us,” he said. “The timely payment of income tax refunds and settling outstanding vendor obligations is a matter of fairness and trust.
