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Thursday, August 18, 2022
HomeNewsArchivesSenate Moves on Property Tax Proposal, Holds Back on Borrowing

Senate Moves on Property Tax Proposal, Holds Back on Borrowing

Out of the three financing proposals submitted by the deJongh administration last week, senators moved forward Tuesday with a bill allowing property tax bills to go out at the 1998 levels, but held back on authorizing the government to borrow another $150 million to plug its projected fiscal year 2010 shortfall.
Last week, acting Gov. Gregory R. Francis sent down three proposals that officials have said would help the government overcome a $170 million deficit brought about by a shaky economy and drop in revenues. Along with the property tax bill, Francis submitted a reprogramming that would allow the government to shuffle around some unused funds to pad the budgets of various departments and agencies whose operations are taking a hit, and a proposal that would add another $150 million to the $250 million borrowing authorization senators passed last year in hopes of getting the government some quick cash.
Discussion on the property tax bill was short Tuesday, with many senators simply saying that they had tried to get the government to issue the old bills a couple years ago, but were told by officials that it wasn’t really an option — an argument that government attorneys have held up in court, saying that the governor had recently signed into law a new property tax rate structure that made the old one moot.
The government’s property tax case has been waging on for years with little resolution, save a recent ruling from District Court Judge Curtis Gomez denying the government’s petition to have the bills issued at the new rates and assessment levels until further notice. But he maintained that the 2003 settlement agreement stemming from the lawsuit doesn’t mean the government can’t tax — it just has to stick with the 1998 data, until the injunction is lifted.
But the provision that would allow the government to sell the 2007 property tax receipts was included in the new borrowing bill, which is still on the back burner.
It appeared Tuesday that many had interpreted the latter proposal to mean that the government was going to be using a third party to collect the outstanding tax payments, which Francis tried to clarify in a press release sent out early in the day.
"The proposed legislation seeks only to use the real property tax receipts as collateral for loans that would allow us to maintain overall government operations,” Francis explained, adding that if the bill were to be approved, payments would still be paid directly to the Lieutenant Governor’s Office.
Francis’ statement didn’t factor into the conversation during the session, with most senators only saying that they were not for privatization or the collection of more than one property tax bill per year.
Meanwhile, amendments tacked onto the bill:
-prevent the government from adding any interest or penalties to the 2006 through 2008 tax bills;
-give property tax exemptions to rental units paid for by federal low-income housing tax credits (the exemption, according to amendment sponsor Sen. Shawn-Michael Malone, was made available to the residents of Patriot Manor, and is now being extended to similar developments for 15 years);
-allow the V.I. Housing Finance Authority to build units up to three stories high;
-mandate the governor to submit certain documentation to the Legislature before and after the government goes out to borrow any more money; and
-require the government to submit a report on federal economic stimulus funds being used in the territory by June 30 and Dec. 30 of each year, and make use of those funds subject to review by the Senate’s Committee of the Whole.
All senators were present during Tuesday’s session.

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