To help make up a projected $50 million budget shortfall this year, Gov. John deJongh Jr. has directed all department and agency heads to immediately freeze all noncritical hiring and to prepare a plan to reduce their expenditures by 5 percent, according to Government House.
DeJongh mentioned the $50 million shortfall in his state of the territory address last week, saying revenues remained well below their 2008 peak. (See related links below)
In an interview with the Source a few days after the address, deJongh said a cutback in allotments would likely be necessary but that he hoped some of the shortfall might evaporate as the economy and revenues improved.
"I’m hoping that with the collections that we realize … that we will be able to see some uptick in the revenues," deJongh said.
Also on the table is cutting back on some contracts and government rentals, the governor said, and he has hopes that the government’s tax collection task force can make a dent in the shortfall with increased delinquent tax collections.
"That’s an area we have been very successful in," deJongh said. "Last year real property taxes went from an average delinquency collection of $4 million to where we have got it up to $12 million.”
He said it is “a very concerted effort on our part and I am hoping that bears some fruit, that we get some returns on that in the first six months of this year," adding that allotments would also have to be cut.
Government House sent a memo to department and agency heads late last week, letting them know that the more-stringent hiring freeze was effective immediately and that Personnel Director Kenneth Hermon Jr. would stop processing all personnel actions that would increase the burden on the General Fund. The freeze would not affect positions paid out of federal or special funds.
DeJongh also directed the agency and department heads to develop a detailed "critical needs hiring plan,” allowing their department or agency to meet its mandates within available resources for the remainder of the fiscal year.
The plan "must speak to the critical nature of the position, indicate how the position will affect the department or agency’s mandate, and indicate how not filling the position will result in lost revenue, increased operational expenses, create a health and safety risk, or places our citizens in harm’s way,” deJongh wrote to the agency heads.
Management and Budget Director Debra Gottlieb also issued a memo Friday letting agency and department heads know their budgets would be reduced by 5 percent starting March 1 and the reduced funding would remain in effect through the rest of Fiscal Year 2013.
Gottlieb directed government leaders to prepare a contingency plan showing the functions, programs and services to be affected by reduced funding.
The plan must indicate what programs and services will be consolidated, restricted or eliminated; how the department or agency employees will be affected (through furloughs, unpaid holidays, reduced work week or dismissals), and what other operational costs will be reduced, such as vehicle use, energy consumption, telecommunication, fuel and professional services expenses, Gottlieb wrote. She also said the plan must include “what specific actions need to be taken."
