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Sunday, June 26, 2022
HomeNewsArchivesLWV: BUDGET BASED ON VAGUE POSSIBILITIES

LWV: BUDGET BASED ON VAGUE POSSIBILITIES

While the League of Women Voters of the Virgin Islands recognizes that budgets are only plans, such plans, particularly budgets for the Government of the Virgin Islands, must be based on realistic possibilities. The proposed Fiscal Year (FY) 2000 Budget as passed by the Legislature is balanced on vague possibilities rather than realistic probabilities.
A Congressional Bill to return an increase of the rum excise taxes to the Virgin Islands appears, as of this writing, to be a reality, but at a figure below the Legislature’s projections. A transfer from the Insurance Guaranty Fund poses serious legal questions.
Despite two extended amnesty periods which have waived interest and penalties on overdue accounts, collections on Delinquent Accounts Receivable in FY1999 and FY2000, to date, have fallen below projected levels. What, exactly, has the Post Auditor included in the anticipated $65 Million in Accounts Receivable for F 2000? That amount contributes substantially to the balance of the Legislature’s proposed budget. Will the Gross Receipts Taxes for FY2000 be sufficient to meet the bond indebtedness for which it is pledged?
The wisdom of pledging a fixed sum for the retirement of bonds from an over-committed revenue stream is untenable. What other sources of revenue are planned to be used to offset this decrease in the General Fund revenues ordinarily used to pay short term operating expenses?
Is the planned use of the proceeds from the bond issue the most practical approach to solving the problems facing the Territory?
Is there any guarantee that we will never have to make a long term loan to pay short term expenses again? If we are ever faced with this kind of a problem again, is there any provision for putting the issue of additional indebetedness before the people in the form of a referendum for their approval? What was the rationale for an authorization of $300 Million? How can we be sure that paying back the $134 Million owed in tax refunds will jump-start the local economy?
How much of this one-shot additional disposable income will actually be spent in the Territory, and how much of this money is the Legislature hoping will find its way back to our Government in the from of current year cash collections?
All of these questions regarding the revenue side of the FY2000 Budget lead the League to wonder if this is, in truth, a balanced budget.
With the acceptance, as a first step, of a $432.1 Million cap as reflected in the revised FY2000 Executive Budget, the intent on the part of the Executive was to meet the fiscal standards as set in the MOU.
With an $18 Million variance on the plus side in the appropriation bills, it is difficult to understand the intent of the Legislature regarding the fiscal standards as set in the MOU.
Those areas which exceed the Governor’s funding recommendations for FY2000 include: the Department of Licensing and Consumer Affairs by $259,000; the Casino Control Commission by $250,000; the University of the Virgin Islands by $2 Million; the V.I. Legislature by $1.5 Million; the Territorial Court Public Defender by $3.4 Million; and the catchall category "Miscellaneous," by $12.4 Million.
The increased appropriation for the Casino Commission is particularly difficult to understand. If a casino is due to open during this fiscal year, and, if government revenues earned from a casino are designated for a Special Fund to defray the costs of the Commission, why is an additional appropriation from the General Fund necessary?
By not eliminating the 5th holiday, by not accepting the Governor’s plan to change the contribution levels of the Government and its employees to the retirement system (which amounts to $8 Million), the Legislature has passed appropriations with apparent disregard for cash-flow and subsequent allotment ceilings. The long list of proposed contributions in the Miscellaneous Section may give false hope to non-profits.
Shouldn’t all branches of government share in the financial sacrifices necessitated by a reduced revenue stream? What is the rationale for increasing the estimated needs of the Department of Licensing and Consumer Affairs, the Legislature, the University of the Virgin Islands and the V.I. Casino Control Commission?
Positive expectations are not outside the boundaries of the fiscal responsibilities set by the League of Women Voters of the Virgin Islands. The League agrees with the Post Auditor that the estimated revenue portion of this budget needs to be revisited. The Budget of the Government of the Virgin Islands must be balanced with neither phantom figures, nor exaggerated "Great Expectations." The Territory must pay for those benefits which the Territory feels are its due.
The League of Women Voters of the Virgin Islands always prefers to give credit where credit is due. In the case of the General Fund appropriation bills for the operation of the three branches of government and its various satellite functions, to give such credit is extremely difficult.

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