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Charlotte Amalie
Monday, August 15, 2022
HomeNewsArchivesSenate Leaders Promise to Cut Deficit Before Layoffs a Necessity

Senate Leaders Promise to Cut Deficit Before Layoffs a Necessity

The Senate leadership promised more budget-balancing action but urged patience in response to Gov. John deJongh Jr.’s recent op-ed saying the government must lay off 500 employees unless this year’s $17.4 million deficit is resolved.

Ever since this year’s State of the Territory address, the deJongh administration has been sounding the alarm about large deficits this year and next, stemming from reduced revenues from generally depressed economic activity during the worldwide recession.

The administration proposed a set of austerity measures including tax increases, cell phone fees and other revenue-enhancing measures; along with pay freezes, eliminating some paid holidays and other cost-cutting measures calculated to bridge the gap.

In March, the Senate passed its own austerity bill, without the very unpopular pay freezes and with a smaller increase to gross receipts taxes than proposed by the administration. Since then, the administration has repeatedly warned that further action is needed or else the revenue crunch will reach a head and force abrupt cuts and layoffs.

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Over the weekend, deJongh’s op-ed piece warned that 500 employees will have to be laid off by June’s end unless the Legislature and his administration work out a plan right away.

"We at the Legislature are equally concerned with the looming problem with the only difference being the method to be utilized," Senate Majority Leader Celestino White said in a letter responding to deJongh.

"You may recall that while the Legislature did not adopt all of the initiative you presented to us earlier in the year, since we viewed some of your measures at the time as too heavy-handed, we did in fact approve several of your measures and added some of our own. As a result … what was then a $75 million dollar deficit is now a $17 million deficit; an improvement of some $58 million dollars," White wrote.

The Legislature will be going into session in the middle of June, and White expects "well thought-out legislation will be approved" to wipe out the budget shortfalls.

Reached by phone Tuesday evening, Senate President Ronald Russell preached the same message of holding onto the horses.

"We don’t want the government to act prematurely when we have measures currently pending in the Legislature," Russell said. "Our first round of effort went really well, and we are down to $17 million deficit for this year and we believe some of us will really demonstrate good leadership and take a conscientious approach to terminating the rest."

Asked what sorts of budget-cutting or revenue-raising actions might be on the agenda, Russell said he and other senators were looking at adjusting property taxes to create a discount as an incentive for paying early and possibly revisiting the administration’s proposal to eliminate one or two paid holidays, among other actions.

They will also be looking at ways to better collect millions of dollars in overdue taxes and at other revenue-generating measures, Russell said.

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