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Charlotte Amalie
Wednesday, June 12, 2024
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Delegate, Governor Disagree On CFO Bill

Calling legislation she introduced to establish a chief financial officer for the Virgin Islands “an evolution,” Delegate Donna Christensen testified to Congress Thursday it was needed because a significant number of V.I. residents believe “the operations of the Government of the Virgin Islands are not as transparent and accountable as they should be.” Meanwhile, Gov. John deJongh Jr. issued a statement and provided testimony to Congress reiterating his opposition to what he called a "deeply flawed bill which purports to address the fiscal imbalances of the Government by creating a new bureaucracy rather than addressing their fundamental causes."

Christensen’s CFO legislation, a pet project for a decade now, "seeks to end this acrimony and restore trust by the public that the revenue projections of their government will be made without political consideration,” she said at Thursday afternoon’s hearing before the Natural Resources Subcommittee on Fisheries, Wildlife, Oceans and Insular Affairs. “This is the process utilized by the District of Columbia through its CFO where there no longer are arguments… over the amount of money to spend, just arguments on how to spend the money that is available.”

Christensen said she was not under any illusion the legislation is a cure-all for what ails the Virgin Islands. “I am proposing it as a five year pilot program for improving transparency and trust in our budgetary and fiscal practices,” she said. “If Virgin Islanders approve of the process that the bill provides, they can vote to make it permanent through a referendum that is provided for after year four of the CFO’s five year term.”

With Hovensa closing, the federal government will be providing some funding to the territory and a CFO would "enhance our ability to successfully apply for assistance at this very critical time because of added accountability and transparency,” she said.

Assistant Interior Secretary for Insular Affairs Anthony Babauta told the committee that the Department of Interior had no objection to the bill because it would constitute only "de minimus interference with self-government in the Virgin Islands, while addressing other issues of mistrust between the executive and legislature and possibly the public," according to Christensen’s office. Babauta called Christensen’s reference to a balanced budget a step in the right direction toward transparency and regaining control of spending and enhancing the ability of the Government of the Virgin Islands to deal effectively with new issues that will arise. He said that revenue management issues are not unique to the Virgin Islands. “It occurs in all the U.S. territories and results in the accumulation of harmful debt…which interferes with each territorial government’s ability to solve current issues,” he said.

Babauta recommended the bill:

  • Require a revenue and spending balance;
  • Specify whether referenced spending limits are low or high and they are not tied to a balanced budget;
  • Say what entity would establish spending limits;
  • Have the CFO “recommend” revisions of government standards for financial management.

Christensen introduced for the record statements from deJongh, the League of Women Voters, and Jason Budsan of St. Thomas. Governor deJongh opposed the bill stating: “It would reduce the authority of the Governor and the Legislature to make tough budgetary decisions, and place such authority in the hands of an unelected official accountable to no one.” The League of Women Voters recommended that instead of a CFO, federal dollars be used to ‘hire an independent expert financial management firm.

DeJongh, meanwhile, said the CFO bill "misses the mark” in its diagnosis of the problems faced by the Government and creates a false illusion of fixing them. "The government has undertaken aggressive and painful measures, on both the revenue and expenditure side to meet its extraordinary budget challenges. The government’s challenges, however, are not expenditures; the challenges are revenues," which deJongh said have declined precipitously in recent years “as a result of the Great Recession, federal actions impacting the Territory’s EDC program, and continuing discriminatory treatment of the Islands in important federal programs.”

DeJongh said he believes to honestly address the present budget crisis, its root causes must be recognized. The current challenges were caused by a drastic drop in revenue that started in 2008, the result of the global economic downturn, he said. “Revenue losses have direct external causes, and are not the result of how numbers are shuffled around by financial managers, as the delegate seems to believe,” deJongh said.

DeJongh disputed the suggestion that government operations are not transparent, saying the budget process, governmental responses to U.S. Inspector General’s recommendations, revenue and expenditure reports, audited financial statements, are all available to the public.

In testimony to the committee, deJongh said “the principles so central to the philosophy of the majority — limiting to the greatest extent possible the intrusion of the federal government into the affairs of State and local governments — are violated by this proposal." He said he opposes it because it restricts local authority and "effectively places such responsibilities back in the hands of the Congress.”

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