Every cent of a $1 per cruise passenger fee Marine Terminal Tax enacted in 2012 will go to the V.I. Port Authority, giving it an additional $1 million per year more for capital projects, if a bill approved in committee Tuesday becomes law.
In 2011 the Senate enacted the $1 per passenger fee as a measure to try to bridge a severe government budget gap. (See related links below) That law allocated 30 percent of revenues from the tax or fee to the Port Authority and the remaining 70 percent to the General Fund.
Sponsored by Sen. Donald Cole, the majority leader, the new bill [Bill 30-0091] instead devotes 100 percent of the revenues from this fee to Port Authority capital projects.
Port Authority general counsel Don Mills testified in support of the bill, saying it "will enable the Virgin Islands Port Authority to begin addressing some of the critical and necessary projects" it has on its plate. "Our structures continue to deteriorate on both sides – the marine and aviation, including both airport aprons," he said.
Dredging by Crown Bay in East Gregerie Channel is the "most critical project under way," Mills said. "If we do not perform this dredging, St. Thomas will lose millions of dollars and scheduled visits from the larger ships that bring thousands of passengers to our shores," he said.
Developing Gallows Bay seaport is another project on hold awaiting funds, Mills said. The Port Authority plans to move all ferry and cargo operations out of Gallows Bay to its container port and make Gallows Bay into a port for fishermen and luxury yachts, he said.
Director of Management and Budget Debra Gottlieb said the government is not opposed to the bill.
Since the user fee was implemented in January 2012, the Port Authority has collected $2.4 million and kept $544,000, while contributing about $1.9 million to the government, she said.
While the change would cost the government $500,000 this year and about $1 million a year thereafter in tax revenue, it would not have a major impact on future budgets. And improving the ports will ultimately lead to increased revenues, she said.
"Such an initiative would improve and enhance the territory’s tourism infrastructure and generate additional revenues to support the General Fund," Gottlieb testified.
While future budgets should not be badly hampered by the change to the law, if it is enacted and made effective right away, the government will need to find a way to replace about $500,000 it would otherwise provide toward the current fiscal year, Gottlieb said.
Cole offered an amendment making the change effective after Oct. 1 of this year – the beginning of the next fiscal year – which the committee approved without objection. The committee voted to send the bill, as amended, on for consideration by the Rules and Judiciary Committee, with only Sen. Clifford Graham, the committee chairman, voting nay.
"I am concerned about taking money away from the General Fund," Graham said. He said he would prefer the administration take a look at the government’s current bonds and prioritize them in terms of its present need.
Voting yea on the bill were Cole, Sens. Judi Buckley, Terrence "Positive" Nelson, Nereida "Nellie" Rivera-O’Reilly and Clarence Payne III. Graham voted nay and Sen. Myron Jackson was absent.
The committee held a bill sponsored by Sen. Tregenza Roach to pay tuition at the University of the Virgin Islands for every student who attends four years of public high school in the territory. The bill seeks to use lottery funds for the purpose.
Roach requested the bill be held for revision to address several technical and practical issues raised by testifiers. One major concern was whether or not the limited funds available from the V.I. Lottery would cover the bill’s costs. The bill was held by unanimous consent.
