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Thursday, August 11, 2022
HomeNewsArchivesDeJongh OKs Sections of Senate's Austerity Bills But Vetoes Others

DeJongh OKs Sections of Senate's Austerity Bills But Vetoes Others

The Senate’s recent attempts to cobble together an austerity package comparable to the one submitted earlier this year by the governor still falls approximately $16.4 million short of the projected budget deficit for this fiscal year, Gov. John deJongh Jr. noted over the weekend.

Handed to the Legislature more than a month ago, the governor’s austerity bill contained provisions that would establish three unpaid government holidays, increase the gross receipts tax by one percent, implement a $1 surcharge on cell phones and raise the hotel occupancy tax by two percent. A second "Payroll Responsibility Act" further proposed freezing government employees’ salaries across the board until FY 2012.

From the get go, senators said the unpaid holidays and salary freezes were not an option. During last month’s marathon session they introduced a two-bill package as a substitute. The first line-items budget appropriations for central government departments and agencies and cuts their funding by approximately three percent. The miscellaneous section of the fiscal year 2011 budget was also cut five percent, though some of its appropriations, according to Senate staff, were further reduced or eliminated completely.

The second – an amendment in the nature of a substitute that recently passed through the full Senate on an 8-7 vote – keeps the cell-phone surcharge and hotel tax increase, but removes the section on unpaid holidays. And despite warnings from members of the government’s financial team that anything less than a one-percent increase in gross receipts taxes could force hundreds of employee layoffs, the amendment pushes for half a percent, as senators repeatedly said that anything higher would cause local businesses to crumble amidst an already weak economy.

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"As a general matter, the Legislature’s action on these bills through the combination of changes to the budget, the change to a line-item budget and the proposed austerity measures go in a different direction than the proposals we had made and sent to the Legislature for its consideration," deJongh wrote in a letter sent over the weekend to Senate President Russell along with his actions on the bills. "That in and of itself, is proper. However, the Legislature has in these two measures only achieved a budgetary savings of $18.8 million, only generated revenues of approximately $8.5 million and, moreover, have the administration in a ham-strung posture with respect to its ability to fulfill its executive functions," the governor added.

Turning his attention to the newly adjusted budget, deJongh said the bill actually appropriated "$106 million in duplicative miscellaneous appropriations," which increased total FY 2011 General Fund appropriations to $932.5 million and the budget deficit by $87.7 million. DeJongh added that he was "troubled" to find that senators continued to include a $31.4 million for negotiated salary increases, even though he has made it clear they would not be funded during the ongoing fiscal crisis.

And while senators contended during last month’s session that the cuts to various government departments and agencies slashed approximately $25 million from the budget, deJongh said in his letter to Russell that his count added up to $17.7 million in total reductions, leaving the government still millions short of its projected $75.1 million deficit for FY 2011.

While deJongh did sign the bill into law, he vetoed the duplicate miscellaneous appropriations but approved a section that repeals portions of the recently enacted Uniform Probate Code – just those sections dealing with estate and probate matters – that was set to go into effect this July.

Looking over the other bill, deJongh said several of the sections needed to be line-item vetoed because of their "encroachment" into functions of the executive branch.

"Some half a dozen sections inappropriately seek to hamstring the executive branch from carrying out its duties to run the government and manage itself effectively," the governor wrote to Russell.

In the bill, senators sought to regulate the use of government vehicles and cell phones, but exempted themselves, along with the governor, lieutenant governor, judges and magistrates and emergency employees, from the regulations.

In his letter to Russell, deJongh described the restrictions on vehicle use as "impractical and unworkable gestures which paint with too broad a brush." He said most of the policies included in the bill are already in place, as are fuel reduction programs.

"I appreciate that automobile use is a high-profile and sensitive area of concern and members of my administration are prepared to work with those in the legislative and judicial branches, as well as the independent instrumentalities, to see how we can better coordinate our policies with respect to the use of government-owned automobiles so as to achieve a real savings in terms of actual cost," the governor wrote.

He added that he has begun reducing the number of vehicles in the central government fleet and will announce additional measures shortly.

The section on cell phones was also line-item vetoed, as deJongh explained he is in the process of reducing from 40 to 47 percent the number of cell phones across government.

The governor also line-item vetoed a section that suspends the government’s authority to procure professional and personal service contracts for two years (this provision is not applicable to contracts already in progress), saying that it is not only a violation of the separation of power doctrine, but "unnecessarily puts the lives of Virgin Islanders at impermissible risk," as it could hamper the government’s ability to procure services during a hurricane or other natural disaster.

DeJongh did sign into law sections increasing the gross receipts tax by .5 percent – which, in the Senate’s version, exempts farmers and commissions paid for the sale of V.I. Lottery tickets – and the hotel room tax by two percent, along with sections that cut the budget of the V.I. Superior Court and the Judicial Council by three percent.

The governor did note, however, that while the judicial and executive branches have taken their share of cuts, the Legislature did not include a similar section for its own budget.

DeJongh said drafting errors also forced him to veto a section that would have imposed a $1 cell-phone charge – the revenues from which would be put toward the new E911 system. The governor said he would resubmit legislation with the errors corrected.

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