June 2, 2004 – Although Gov. Charles W. Turnbull's aim of eliminating what the administration is projecting as a $92.4 million deficit for fiscal year 2005 is appropriate, the means he proposes for doing so are likely not to resonate well with the Legislature or the community.
While admitting that implementing his proposed cost reductions and new taxes could be "painful and difficult," he nonetheless stuck by his guns. And he announced another new initiative.
Speaking at a Tuesday press conference, Turnbull said his fiscal year 2005 budget includes a proposed two-year moratorium on the payment of negotiated raises for government employees. This is the third such moratorium the governor has proposed within a year. The other two were overridden by the Senate, and it appears very likely that this one will meet the same fate.
The governor defended his measure, saying it would "give us time to bring all the stakeholders together, government unions, legislators, private sector and community leaders, to develop a mechanism by which we can compensate our hard-working employees…"
Turnbull had good news on Tuesday for the Internal Revenue Bureau, for which he is proposing an extra $1.3 million to hire personnel to help with tax collections. After the press conference, Louis Willis, IRB director, said he plans to hire retired federal IRS agents for that purpose, including one criminal investigator, two auditors and two collection agents.
Pending, meanwhile, is Turnbull's FY 2004 supplemental budget, which the Legislature sent back to him last Friday in a heavily amended version that includes $11.8 million for negotiated raises. Turnbull had proposed $2.8 million, for teachers only, but the senators added appropriations to cover the negotiated raises owed other government workers, as well, some of which date from 2002. (See "Supplemental Budget Passes; Unions Win Raises".)
The governor has until June 10, by Source calculations, to act on the supplemental budget or see it take effect without his signature.
Whether the moratorium the governor is proposing for FY 2005 includes the teachers' raises or whether the governor will leave those raises only in the FY 2004 budget could not be ascertained on Wednesday. Calls to Nathan Simmonds, the governor's chief financial officer, were not returned by late in the day.
Turnbull said he "might veto" some things added to the FY 2004 supplemental budget by the Legislature but, there is one he "definitely will not" — a $5.6 million appropriation for the territory's Hurricane Marilyn Community Disaster Loan from the Federal Emergency Management Agency.
The administration has been pursuing forgiveness by FEMA of all or parts of the loan for years. Turnbull said the negotiations are "going well, but it will be some time before we can expect a final decision."
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