May 18, 2007 — Gov. John deJongh Jr. painted a grim picture of the territory's finances Friday in his address to the annual meeting of the St. Thomas/St. John Chamber of Commerce at the Westin Resort and Villas on St. John.
"By no means is this meant to depress you," deJongh said. Throughout his presentation, he spoken often about accountability, and after the speech he said he had hired one of the world's top four auditing firms, Ernst & Young, to examine the territory's finances.
The governor also said that this was a great time for the Virgin Islands, despite tremendous challenges.
"Out of challenges is where opportunities come," he said. The territory's debt includes $520 million for infrastructure improvements and $580 million to pay for operating costs in the late 1990s and early 2000s, deJongh said.
"We've pushed that off on another generation to pay for," he said. The government can't prepay public debt because to do so would incur penalties, he explained.
The territory owes $400 million in retroactive pay to government workers, and has $200 million worth of debt that includes $40 to $60 million owned to vendors, $40 to $60 million in encumbrances and $60 million appropriated by the Legislature but not funded, deJongh said.
Additionally, he said, the Government Employees' Retirement System has 6,000 people collecting benefits, but the government has only 9,000 employees paying into the system, implying that this has helped put the system in a precarious financial state.
The governor suggested that it was time for a two-tier retirement system such as those adopted in other municipalities. In a two-tier system, newer workers pay in at a different rate than older workers.
Although public safety is high on his agenda, deJongh said, the financial problems also affect the number of officers on the beat. Since overtime eats away at the Police Department's budget, money for recruitment of more officers falls by the wayside, he said.
With most of the people in the room from St. Thomas, deJongh only touched on the number one hot-button issue on St. John: the controversial Sirens condominium project. The governor recently vetoed a variance passed by the Legislature that allowed for increased density at the project.
"I don't care how many newspaper ads you take out, a bad development is a bad development," deJongh said, waving a full-page advertisement from a local newspaper.
In the ad, the Sirenusa developer touted the project's benefits to the territory and gave the developer's take on the issues surrounding the construction project. Development involves a process, which was not followed in the Sirenusa case, deJongh insisted.
The governor also spoke about the relationship between the economy and the government's ability to provide things like services for the homeless. He called on chamber members to help him solve the territory's problems.
"There will be times you'll take a position I don't like, but that doesn't mean we can't work together," he said. Sometimes he will have a position the chamber members won't like, he added.
Solving the territory's problems will also take involvement by the unions and the Legislature, deJongh said. He vowed to protect the territory's Economic Development Commission program even if he has to challenge the federal Internal Revenue Service.
Friday's meeting also included elections for chamber officers. Members elected Thomas P. Brunt as chamber president and Randolph H. Knight as its vice-president. Those seats were uncontested.
Members also elected 10 people to serve on the board of directors: Mulo Alwani, Mario Austin, former president Thaddeus Bast, Sebastiano Paiewonsky Cassinelli, Mike Daswani, Cecile deJongh, Steve Morton, Judy Nagelberg, Beryl Todman, and Janette Millin Young.
Kate Norfleet was elected as the St. John director.
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