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Charlotte Amalie
Tuesday, July 16, 2024
HomeNewsArchivesFYI from Sen. Lorraine Berry

FYI from Sen. Lorraine Berry

The following material is being published, unedited, exactly as it was received via e-mail from the office of the government official named, as a Source community service. Government office holders wishing to contribute to the FYI bulletin board must e-mail source@viaccess.net. The Source reserves the right to choose what is published.
"WE HOLD THESE TRUTHS TO BE SELF EVIDENT, THAT ALL MEN ARE CREATED EQUAL, THAT THEY ARE ENDOWED BY THEIR CREATOR WITH CERTAIN UNALIENABLE RIGHTS THAT AMONG THESE ARE LIFE, LIBERTY AND THE PURSUIT OF HAPPINESS. THAT TO SECURE THESE RIGHTS, GOVERNMENTS ARE INSTITUTED AMONG MEN, DERIVING THEIR JUST POWERS FROM THE CONSENT OF THE GOVERNED, ——THAT WHENEVER ANY FORM OF GOVERNMENT BECOMES DESTRUCTIVE OF THESE ENDS, IT IS THE RIGHT OF THE PEOPLE TO ALTER OR TO ABOLISH IT, AND TO INSTITUTE NEW GOVERNMENT, LAYING ITS FOUNDATION ON SUCH PRINCIPLES AND ORGANIZING ITS POWERS IN SUCH FORM, AS TO THEM SHALL SEEM MOST LIKELY TO EFFECT THEIR SAFETY AND HAPPINESS."
IN THE US VIRGIN ISLANDS, WE TAKE THE AFOREMENTIONED NOBLE SENTIMENTS FROM THE DECLARATION OF INDEPENDENCE SERIOUSLY. AS FELLOW AMERICANS, WE BELIEVE THAT IT IS THE RIGHT OF THE PEOPLE OF THE VIRGIN ISLANDS TO ESTABLISH ORGANIZATIONS AND INSTITUTIONS THAT ALLOW SELF-DETERMINATION, PUBLIC SAFETY, ECONOMIC DEVELOPMENT, AND FISCAL RECOVERY. SINCE OUR INCLUSION INTO THE AMERICAN POLITICAL SYSTEM IN MARCH 1917, WE HAVE STRUGGLED TO ACQUIRE GREATER AUTONOMY, PROSPERITY, AND DEVELOPMENT WITHIN THE BEST TRADITIONS OF THIS GREAT NATION.
AS AN UNINCORPORATED TERRITORY, THE US VIRGIN ISLANDS HAS ENCOUNTERED A SERIOUS FISCAL CRISIS, WHICH IS THE RESULT OF BOTH EXTERNAL AND INTERNAL FACTORS. AS THE MOST SENIOR LEGISLATOR WHO IS SERVING HER ELEVENTH CONSECUTIVE TERM, I AM DEEPLY TROUBLED BY OUR FISCAL MORASS. I HAVE PROPOSED BILL NO. 25-0150 WHICH AMENDS TITLE 33 VIRGIN ISLANDS CODE TO ESTABLISH THE VIRGIN ISLANDS FINANCIAL REVIEW BOARD. THIS FINANCIAL REVIEW BOARD/FRB IS EQUIVALENT TO A TERRITORIAL FINANCIAL CONTROL BOARD THAT CONSISTS OF QUALIFIED, RESPECTED RESIDENTS OF THE US VIRGIN ISLANDS.
BEFORE THE RESOURCES COMMITTEE, HOUSE OF REPRESENTATIVES IS THE CHIEF FINANCIAL OFFICER/CFO PROPOSAL OR THE "AMENDMENT IN THE NATURE OF A SUBSTITUTE TO H.R. 3589." THIS PROPOSAL SEEKS TO RESOLVE THE FISCAL CRISIS OF THE US VIRGIN ISLANDS THROUGH THE APPOINTMENT OF A PUBLIC POLICY MAKER WHO OPERATES AS A [SUPER]DIRECTOR OF THE OFFICE OF MANAGEMENT AND BUDGET WITH EXTRAORDINARY POWERS. DESPITE APPARENT SIMILARITIES WITH THE CFO PROPOSAL, MY PROPOSED FRB IS DIFFERENT IN CONSCIOUS INTENT AND POLITICAL CONSIDERATIONS.
A FINANCIAL REVIEW BOARD OR FINANCIAL CONTROL BOARD IS THE LAST RESORT ANY POLITICAL LEADERSHIP HAS FOR RESOLVING FISCAL PROBLEMS. IN ESSENCE, IT IS A TACIT ACKNOWLEDGMENT THAT THE POLITICAL SYSTEM HAS FAILED IN REGARDS TO RESPONSIBLE FISCAL POLICY.
IT IS SIMILAR TO A FISCAL TASK FORCE THAT THE INTERNATIONAL MONETARY FUND/IMF CREATES TO IMPLEMENT AN AUSTERITY PACKAGE IN MANY DEVELOPING NATION-STATES. NONETHELESS, THERE IS PRECEDENCE ON THE MAINLAND FOR THE FINANCIAL CONTROL BOARD MODEL. IT HAS BEEN UTILIZED IN NEW YORK, PENNSYLVANIA, AND WASHINGTON, D.C. IT IS TRIED AND TESTED. IN FACT, ONE OF THE TESTIFIERS IN SUPPORT OF THE CFO, CONGRESSWOMAN ELEANOR HOLMES NORTON, SUPPORTED THE FINANCIAL CONTROL BOARD CONCEPT IN WASHINGTON, D.C. IRONICALLY, THE CFO PROPOSAL AS PRESENTLY WRITTEN AVOIDS ANY REFERENCE TO A FINANCIAL CONTROL BOARD, BUT THE WASHINGTON D.C. EXPERIENCE IS OBVIOUSLY ITS ANTECEDENT.
BY ITS VERY NATURE, THE FRB IS ORGANIZED TO MAKE THE TOUGH DECISIONS THAT ELECTED OFFICIALS CANNOT OR WILL NOT MAKE. FOR THE SAKE OF HISTORICAL CONTEXT, I MUST INFORM YOU THAT I SPONSORED LEGISLATION THAT SOUGHT THE FORMULATION OF A FINANCIAL CONTROL BOARD SEVEN YEARS AGO. IN THE PREVIOUS ROY SCHNEIDER-KENNETH MAPP ADMINISTRATION (1995-1999), THERE WAS NO POLITICAL WILL TO RESOLVE OUR FISCAL CRISIS. IN MARCH 11, 1997, I WAS PRESIDENT OF THE 22ND LEGISLATURE, AND A MAJORITY OF EIGHT SENATORS WERE ABLE TO PASS LEGISLATION THAT SUPPORTED A FINANCIAL CONTROL BOARD. HOWEVER, GOVERNOR SCHNEIDER VETOED THE BILL.
I MUST ADD THAT THE THEN MINORITY SENATORS WOULD NOT SUPPORT THE LEGISLATION DUE TO THE MAJORITY/MINORITY DIVISION.
VIRGIN ISLANDERS HAVE BEEN EYEWITNESSES TO THE INABILITY OF THE SCHNEIDER-MAPP ADMINISTRATION AS WELL AS THE PRESENT LEADERSHIP TO CORRECT THE TERRITORY'S PERENNIAL FISCAL CRISES. THE "SOLUTIONS" OF THE PRESENT CHARLES TURNBULL-VARGRAVE RICHARDS ADMINISTRATION WILL NOT IMPROVE THE FISCAL HEALTH OF THE VIRGIN ISLANDS GOVERNMENT. THE "SHORT TERM" BORROWING AND BOND ISSUES WITH A 30-YEAR PAYBACK CAN ONLY POSTPONE THE TOTAL COLLAPSE OF THE VIRGIN ISLANDS PUBLIC SECTOR. THE MAJOR ISSUE BEFORE THE POLITICAL LEADERSHIP IS––RESTRUCTURING THE ENTIRE PUBLIC SECTOR AND REFORMULATING THE TAX BASE TO SUSTAIN THE NEWLY RESTRUCTURED PUBLIC SECTOR. SUCH MAJOR REFORMS WILL TAKE A CADRE/CORE OF HIGHLY SKILLED AND WELL-EDUCATED EXPERTS, NOT POLITICIANS. A FRB IS THEREFORE NECESSARY AND IS A BETTER TOOL THAN A SINGLE INDIVIDUAL, A CFO. BILL NO. 25-0150 IS A SOLUTION TO OUR FISCAL CRISIS.
THE FINANCIAL REVIEW BOARD WILL HAVE THE FOLLOWING BASIC FEATURES:
1. SEVEN MEMBERS WILL BE SELECTED BY GOVERNOR CHARLES TURNBULL AND CONFIRMED BY THE 25TH LEGISLATURE.
2. THESE MEMBERS WILL HAVE EXPERTISE IN FINANCE AND MANAGEMENT.
3. THE COMMISSIONER OF FINANCE AND DIRECTOR OF THE OFFICE OF MANAGEMENT AND BUDGET WILL BE EX OFFICIO MEMBERS.
4. WITH THE GOVERNOR, THE REVIEW BOARD WILL DEVELOP A FIVE-YEAR PLAN THAT WILL RESTORE BALANCED BUDGETS.
5. THE 25TH LEGISLATURE WILL APPROPRIATE 200,000 DOLLARS FROM FISCAL YEAR 2005 BUDGET TO FUND THE BOARD AND THEREAFTER-FEDERAL FUNDS MUST BE IDENTIFIED.
6. THE BOARD WILL LAST FIVE YEARS.
THE FRB IS A TEMPORARY INSTITUTION THAT WILL BE ORGANIZED TO ASSIST FISCAL RECOVERY. ITS MEMBERS WILL BE RESIDENTS WHO ARE TECHNOCRATS AND HIGHLY REGARDED WITHIN THE TERRITORY. THE FRB IS THUS A LOGICAL MECHANISM FOR RESOLVING THE TERRITORY'S FISCAL CRISIS.
MOREOVER, OUR FISCAL CRISES ARE TIED TO EXTERNAL FACTORS THAT ARE RELATED TO THE GLOBAL ECONOMY AND OUR UNIQUE POLITICAL STATUS. I MUST REMIND YOU OF THE FOLLOWING:
OUR FISCAL PROBLEMS ARE SYSTEMIC AND STRUCTURAL. THIS MEANS THAT OUR VERY POLITICAL STATUS AND OUR RELATIONSHIP TO THE FEDERAL GOVERNMENT ARE A MIXED BLESSING. FOR EXAMPLE THE EARNED INCOME TAX CREDITS OF THE PAST TWO DECADES HAVE BEEN DEVASTATING TO OUR TAX BASE.
IN FISCAL YEAR 2004, WE WILL LOSE OVER 50 MILLION DOLLARS DUE TO THE TAX BREAKS TO THE MIDDLE AND UPPER CLASS RESIDENTS AND EARNED INCOME CREDIT FOR THE POOR.
THE AIRLINE INDUSTRY HAS BEEN IN CRISIS BEFORE (AND ESPECIALLY AFTER) 9/11. THIS HAS REDUCED THE ABILITY OF THE TERRITORIAL TOURISM PRODUCT TO EXPAND ON A FASTER BASIS, ESPECIALLY ON ST. CROIX.
THE GASOLINE EXERCISE TAX ISSUE HAS NEVER BEEN RESOLVED IN OUR FAVOR. POTENTIALLY, THE US VIRGIN ISLANDS COULD RECEIVE HUNDREDS OF MILLIONS OF DOLLARS PER YEAR IF THESE REVENUES WERE RETURNED TO THE TERRITORY. THIS WOULD COMPENSATE FOR THE UNFUNDED FEDERAL MANDATES AND REVENUE SHORTFALLS.
THESE FACTORS ARE REAL. I WISH I COULD APPEAR BEFORE THE HOUSE RESOURCES COMMITTEE AND SAY THAT I CAN SINGLE-HANDEDLY CHANGE THESE FACTORS AND THAT I CAN RALLY MY COLLEAGUES, ESPECIALLY ALL DEMOCRATS, TO SUPPORT FISCAL RESPONSIBILITY. BUT THAT WOULD NOT BE REALISTIC. I CANNOT APPEAR BEFORE ANYONE AND SAY THAT I, OR FOR THAT MATTER, ANY SINGLE LEADER IS ABLE TO "RALLY THE TROOPS" WHEN IT COMES TO FISCAL RESPONSIBILITY. IN FACT, MY FINANCIAL REVIEW BOARD PROPOSAL IS ACTUALLY THE LAST CHANCE FOR MY COLLEAGUES TO REDEEM THEMSELVES AND IT IS SCHEDULED TO BE HEARD IN THE GOVERNMENT OPERATIONS COMMITTEE ON JUNE 23RD.
AFTER A NUMBER OF PUBLIC MEETINGS IN MAY 2004, I SEE THE POSSIBILITY OF A COMPTROLLER BEING HIRED BY THE FRB. WE CAN CONSIDER CREATIVE MEANS TO ALLOW FEDERAL ASSISTANCE THROUGH TECHNICAL SUPPORT IN OUR FISCAL POLICY MAKING. ALSO WE ARE SEEKING FINANCIAL ASSISTANCE FOR ITS OPERATIONS
. SUCH ASSISTANCE WILL ALLOW A SWIFT RETURN TO GOVERNANCE AND AUTONOMY WITHIN 5 YEARS.
THUS, I TAKE ISSUE WITH THE CFO PROPOSAL DUE TO ITS INCOMPLETENESS AND THE LOCUS OF ITS INITIATIVE. DESPITE A FAIRLY RESPECTFUL AND PROGRESSIVE RELATIONSHIP BETWEEN THE INTERIOR DEPARTMENT AND THE US VIRGIN ISLANDS, THE CFO PROPOSAL PLACES THE INITIATIVE OF FISCAL RECOVERY ON AN EXTERNAL DYNAMIC. ALTHOUGH THE PROPOSAL PURPORTEDLY CALLS FOR A "VIRGIN ISLANDS CHIEF FINANCIAL OFFICER SEARCH COMMISSION" AND PARTICIPATION OF THE GOVERNOR THROUGH THE SELECTION OF THE CFO, THE SECRETARY OF INTERIOR HAS AN UNCOMFORTABLE DEGREE OF POWER. THE SECRETARY IS THE CHAIRPERSON OF THE COMMISSION, OR HIS/HER DESIGNEE, AND SHALL VOTE ONLY IN THE CASE OF A TIE. IF THE COMMISSION FAILS TO SUBMIT RECOMMENDATIONS FOR THE CFO WITHIN 60 DAYS OF ITS FIRST MEETING, OR IF THE GOVERNOR FAILS TO SUBMIT THE NOMINEE TO THE LEGISLATURE, THE SECRETARY OF THE INTERIOR SHALL INDEPENDENTLY MAKE THESE RECOMMENDATIONS TO THE GOVERNOR NOT LATER THAN 90 DAYS AFTER THE COMMISSION’’S FIRST MEETING.
PRESENTLY, THE SECRETARY OF INTERIOR GALE NORTON IS A FRIEND OF THE VIRGIN ISLANDS, BUT WHAT HAPPENS IN JANUARY 2005. WITH DUE RESPECT TO THE MEMBERS OF THE HOUSE RESOURCES COMMITTEE, NO ONE KNOWS THE OUTCOME OF THE NOVEMBER 2004 ELECTIONS, AND BY EXTENSION, NO ONE KNOWS WHO WILL BE THE SECRETARY OF INTERIOR NEXT YEAR.
THE LOGIC OF SELF-DETERMINATION IS THAT THE PEOPLE WILL BE FINAL ARBITERS OF THEIR DESTINY. ALBEIT THE CFO PROPOSAL HAS INNOCUOUS PROVISIONS SUCH AS THE INTERIOR SECRETARY’’S PRESENCE ON THE COMMISSION AND HER PROVIDING A FINANCIAL MANAGEMENT SYSTEM, IT SEEMS TO BE DRIVEN BY CONGRESSIONAL FIAT. I HONESTLY BELIEVE THAT A TERRITORIAL FINANCIAL REVIEW BOARD WOULD NOT SUFFER THIS MALAISE BUT INSTEAD IT WILL BE PERCEIVED AS A LEGITIMATE CONSTRUCTIVE TOOL FOR THE LONG-TERM DEVELOPMENT OF THE TERRITORY.

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