The critical financial condition of the Virgin Islands government, which nearly forced the layoff of hundreds of government workers, could worsen before the end of the first quarter of the year 2000. That not-so-rosy assessment was offered by Management and Budget Director Ira Mills as he appeared Sunday night on public televisions "Behind the Headlines" program.
Mills suggested that "unless drastic steps are taken to reduce the size of government," when money from the recent $300 million loan run out, it will be back to square one in terms of the governments ability to cover its operational costs.
"But we can manage what we have and avoid the payless or delayed payday," he countered, noting that the territory has to "spend less than the revenues it takes in."
Mills said decisive action will be needed to reduce the government workforce.
He admitted that the steps that must be taken "will not necessarily please everyone but they must be effected to bring about change."
Mills, the administrations point man on government finances, also said that Gov. Charles W. Turnbull and his key advisers have begun to review options that are not new to the elected officials as they look toward reducing the size of government.
"A reduced workweek is one concept being discussed," Mills said, noting that in other financially strapped jurisdictions, management and employees have struck an agreement where although the workday will be reduced, the health insurance and retirement benefits will not be affected in terms of the employees contributions.
Though there have been ongoing discussions ongoing since Turnbull took office in January about the necessity of cutting the payroll and reducing the workforce, there is little evidence that any significant changes have been made.
Mills said some reductions could come from early retirement.
An early retirement incentive plan that was referenced in Turnbull's FY 2000 budget and for which money was allocated from the $300 million bond issue has never been formalized by either the administration or the Legislature.