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HomeNewsArchives'Painful' DeJongh Budget Slashes Nearly $60 Million

'Painful' DeJongh Budget Slashes Nearly $60 Million

While revenue projections are slowly rising, there’s still no wiggle room in next fiscal year’s $731.3 million General Fund budget, so the government has to cut back – by nearly $59 million – and live within its means, according to Gov. John deJongh Jr.

In a letter sent to Senate President Ronald E. Russell late Friday along with the FY 2012 budget, the governor said that with the option for borrowing money now off the table, the only thing left to rely on is the territory’s recurring tax revenues to fund operations.

"To do so will be painful, but we must move immediately to bring our monthly operating costs in line with our revenues and accept the cuts necessary to accomplish this most basic objective," the governor wrote. "These cuts will be felt across the government and require reductions in the current appropriation levels of all departments and agencies, including the other branches of government and the semi-autonomous agencies."

The FY 2012 General Fund budget is about $59 million less than the revised FY 2011 budget, which has a current appropriation of $790.1 million. DeJongh said that while the budget factors in a projected 7 percent increase in personal and corporate income tax collections, a 20 percent increase in gross receipts taxes and the collection of two years’ worth of real property tax bills, projected net revenues for FY 2012 are still more than $100 million below levels seen before the ongoing economic crisis.

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The General Fund budget includes: $311.7 million for personnel services; $138.4 million for fringe benefits; $ 13.0 million for supplies; $131.2 million for other services and charges; $ 20.9 million for utilities; $115.3 million for "all expenses," and $800,000 for capital outlays.

The "all expenses" category includes a proposed $52.9 million for the judicial and legislative branches, $30.9 million for the University of the Virgin Islands, $4.05 million for WTJX Channel 12 and $25.9 million for the V.I. Waste Management Authority.

The miscellaneous section of the budget is $83.4 million.

The addition of $112.6 million in other appropriated funds, $2.5 million in federal economic stimulus money, $104.4 million in non-governmental funds and $72 million in other non-appropriated funds pushes the overall executive budget total to $1.2 billion.

Other steps, such as a proposed restructuring and realigning of various departments and agencies, are also critical components in the submission of a balanced budget, Office of Management and Budget Director Debra Gottlieb added in her annual address. Part of this year’s submission is a variety of enabling legislation meant to pump up the coffers, including bills calling for: increased gross receipts taxes by an extra .5 percent; nine unpaid government holidays; and the repeal of a waiver granted by the Senate on interest and penalties for fiscal years 2006 through 2008 property tax bills.

"This coming year, even more than in the current year, we must make do with less, we must make and live with hard decisions, and we must resist the temptation to evade our responsibility to make hard choices for our community," deJongh wrote to Russell Friday.

"There are no easy ways around the issues we are grappling with or simple solutions to the problems that we face, but the duty to lead falls upon each of us that have chosen the path of public service and leadership, and I look forward to your continued positive collaboration in the weeks and months ahead, as together we embrace our responsibility to lead our community to a better future," he said.

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