77.7 F
Charlotte Amalie
Sunday, April 21, 2024
HomeNewsArchivesProperty Tax Proposal Will Help Plug Deficit, Officials Say

Property Tax Proposal Will Help Plug Deficit, Officials Say

Not collecting property tax bills for the past four years has left more than a $100 million hole in the government’s coffers–one that officials are hoping to fill with a proposal that could bring in some much-needed cash while the matter continues to work itself out in District Court.
This week, acting Gov. Gregory R. Francis submitted a bill to the Legislature asking senators for the authorization to issue fiscal year 2006, 2007, 2008 and 2009 tax bills at the old 1998 levels. District Court Judge Curtis Gomez already said in a recent opinion that the government has always had this option, which government attorneys have argued against since the governor proposed and signed into law a new rate structure in 2008.
Government attorneys have lobbied the judge to modify the freeze on property taxes by allowing the bills to be sent out at the new rates, but Gomez ruled against their request last month, forcing the government to go back to the old system until the injunction is lifted.
To begin the process, a second financing bill submitted by the government this week amends the miscellaneous section of the fiscal year 2010 budget to allow the Lieutenant Governor’s Office to reconfigure its computer system and "reprogram data back to the 1998 levels."
Most commonly referred to as a reprogramming, the bill seeks to shuffle around money in the 2010 budget for a number of what has been described as "critical" expenses, including operations at the Justice and Tourism departments, the V.I. Housing Finance Authority and Gov. Juan F. Luis Hospital on St. Croix, which has an outstanding electricity bill of $2 million.
A third financing proposal submitted this week also contains a section authorizing the governor to sell — either publicly or privately — the government’s 2007 property tax receipts, which will be secured with any rum revenues left over after debt service payments on bonds, along with Diageo and Cruzan Rum obligations, are taken care of.
"The administration has struggled long and hard to avoid issuing real property tax bills that could result in a higher tax obligation than necessary for the people of the Virgin Islands," Francis said in a letter sent, along with the three finance proposals, this week to Senate President Louis P. Hill. We have also sought to avoid the additional cost that the government will incur by repeatedly changing the real property tax billing system. However, the government is left with few good choices, and so we must proceed with any and all feasible measures to close the projected operating deficit."
In the third bill, the government is also asking for the authority to go back to the bank and borrow another $150 million needed to cover the funding gap that, according to members of the governor’s financial team, add up to about $170 million for FY 2010.
The extra money is added into the $250 million authorization signed into law last June, which mandated the government to first tap into its public fund accounts before turning to the bank for money. That requirement has been modified in the government’s new proposal, which says the governor "may" look to borrow public funds, but can turn to the bank or other financial institutions if there’s not enough money in the accounts.
The bill also gives the government the flexibility to pay off some of its other outstanding debts — such as the $45 million owed to the Insurance Guaranty Fund, which was tapped to pay down the approximately $300 in retroactive wages owed to government employees.
It’s unclear at this point whether the bills will be special-ordered to the floor during the session, but Francis’ office sent out a release Thursday announcing that "newly proposed regulations" set up for the payment of property taxes — including installment plans and early payment incentives — will be available for public review and comment for the next 20 days.
Under the new regulations, residents can apply to pay their bills on a monthly, quarterly or semi-annual basis, and can be eligible for a 5 percent discount on their bill if they pay in full before the due date.
"We realize that property taxes could pose a significant burden to some of our property owners, but we are committed to exploring every option that reduces that burden," Francis said in the release.
Residents can log onto www.ltg.gov.vi to look over the rules or visit the Lieutenant Governor’s Office at Government House on St. Croix or Kongens Gade on St. Thomas.
A copy of the proposed rules will also be available at local libraries, and residents are asked to email their comments to comments@lgo-vi.gov.

Print Friendly, PDF & Email
Keeping our community informed is our top priority.
If you have a news tip to share, please call or text us at 340-228-8784.

Support local + independent journalism in the U.S. Virgin Islands

Unlike many news organizations, we haven't put up a paywall – we want to keep our journalism as accessible as we can. Our independent journalism costs time, money and hard work to keep you informed, but we do it because we believe that it matters. We know that informed communities are empowered ones. If you appreciate our reporting and want to help make our future more secure, please consider donating.

UPCOMING EVENTS