March 28, 2003 – The cash-flow crisis in the V.I. government has apparently intensified. As a result the Turnbull administration has undertaken cost-cutting measures that it says will keep the government afloat in the weeks ahead.
Most importantly, the Public Finance Authority, an agency dominated by administration officials, has advanced the government $7 million to cover operating costs. The PFA's short-term loan, from proceeds from a 1998 bond issue, was approved Thursday at the authority's regular meeting.
The resolution granting the loan requires repayment by the end of April. By that time income taxes due April 15 should have replenished the government's coffers.
But the governor says he has also initiated cost-cutting measures. His statement came after Sen. Celestino White accused the administration Thursday of attempting to "balance the budget on the backs of government employees."
White said he learned about the administration's plans after meetings involving the governor, financial consultants and Cabinet members were held at the Ritz-Carlton Hotel, a posh East End resort on St.Thomas.
"We need to start to talk about rolling back those raises given to commissioners and agency heads last year around election time," White said.
White said he will await more information on the administration's plan to cut costs but opposes any approach that would have government workers foot the bill for years of overspending by government leaders.
"When those changes are going to be made at the expense of the rank-and-file employees, you are going to have problems with Celestino White," he said.
Turnbull was quick to respond to White's assertions confirming that he has ordered a number of cost-cutting initiatives, including a reduction in travel, the elimination of private telephone lines in government departments, an across-the-board hiring freeze in the executive branch, the recall of the majority of cellular phones, drastic cuts in overtime and a general reduction in awarding personnel services contracts.
"We are also looking at reprogramming prior bond proceeds and taking a closer look at the abuse of sick leave," Turnbull said, adding, "If things should worsen, there are drastic actions that we may be forced to take."
Turnbull did say there would be exceptions to the hiring freeze in key departments, including Education, Police, Fire, Health and Human Services.
While admitting that a reduced government workweek had been discussed, Turnbull said it was not approved. However, "It's something that may be used if things worsen," he said.
Turnbull said the government's financial condition had deteriorated over time, primarily due to the slumping economy, a situation exacerbated by the military action against Iraq.
"These are pro-active steps being taken to bridge anticipated revenue shortfalls," he said. "It's something all states are doing."
The territory is facing uncertain financial times, Turnbull said. "We have a continuing cash-flow problem and with the war in Iraq and the increasing threat of terrorism, we are looking at dwindling revenues into the government coffers."
Turnbull has called a Cabinet meeting for mid-afternoon Friday to discuss the austerity initiatives with his Cabinet and top-level Government House staff.
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