"It’s time to do what must be done," Gov. John deJongh Jr. said Wednesday, challenging the V.I. Senate to reconsider and pass the proposed Fourth Amendment to the Hovensa operating agreement, a proposal that would set up a framework for the sale of the shuttered refinery.
In his radio broadcast Wednesday morning, deJongh also called on the Senate to make the hard decisions necessary and pass a budget for the fiscal year that begins Tuesday, chiding the lawmakers for failing to take any action during a critical period.
"I am speaking to you now out of my deep concern and disappointment over the current state of non-action and indecisiveness in which we now find ourselves," he said. "At a moment when we must act, when we must make some decisions critical to our future, our politics have been rendered immobile. Our senators will not act."
The governor outlined steps he said must be taken to begin rebuilding the territory’s economy.
"Here is what we need to do. It is time for the Legislature to ratify the Fourth Amendment to the Hovensa agreement and get St. Croix’s economy going again. If they have an alternative that will give us the same level of economic boost, then propose it, let’s discuss it and, if it promises to do what they say, I’ll approve it. But they and I each know well that there is none.”
"It is time to start working with business and expressing some greater understanding of the challenges that businesses face in doing business here. Let’s move on the needs expressed by the trustees of the Government Employees Retirement System and the recommendations of the pension reform task force. Let’s pass the Fiscal Year 2014 budget on time so that we can deal with all the other issues that confront us," the governor said.
In his speech, the deJongh detailed the challenges that have hindered economic development in the territory, beginning with the global economic recession that hit in 2008 and "ripped the economic foundation from under our community."
Just as the territory was beginning to show signs of recovery, Hovensa announced it would cease refinery operation at its St. Croix facility and convert it to oil storage, costing more than 2,000 jobs. The impact rippled through the island economy.
Hovensa officials initially expressed no interest in selling the facility but, after more than a year of negotiations, the government and the company agreed on a proposed amendment that would have set the stage for the sale of the facility to a company that might operate it again as a refinery.
But on Aug. 7, the Senate rejected the proposed amendment by an 11-3 vote. Within a week the company announced that, in the face of the deal’s rejection and the re-imposition of the Third Concession Agreement, it could not profitably run the oil storage facility. As a result, officials said, Hovensa would close the facility and the fuel rack, which is the source of fuel oil for virtually everything in the territory, from automobiles to airliners to WAPA’s electrical generators.
Recently the U.S. Department of the Interior slashed the advance payment of rum cover-over revenues for the 2014 fiscal year, expected money the V.I. government has already borrowed against..
Yet in the face of this series of obstacles, deJongh said, "We did not give up!"
"We did what you have to do when facing difficult circumstances – you seek out the best paths forward, you swallow hard and make the difficult decisions, you give people hope and you set the foundation for the future," the governor said Wednesday. "I recognized the unpopularity of many of the steps that we chose, but we did what we had to do. We borrowed against future rum cover-over revenues; we postponed salary increases we could not support; we increased tax rates; and the Legislature reduced salaries for a period of time – all so that we could maintain essential government programs and services and not compound the downturn in the private sector with massive public layoffs."
The territory’s problems are solvable, deJongh said, but they require sacrifice and require everyone working together. But he said the Senate has been long on talk and short on actual solutions.
"I go to work every day – seven days a week – and will not lose hope or faith in our future,” the governor said, “But I have lost patience with those who will not recognize what must be done and then do it.”
“I have yet to get a meaningful suggestion from any member of the Senate when I have repeatedly asked them what alternative they would propose that could get as many jobs in place as quickly as getting the refinery reopened. I quite frankly told them it is too easy for them to make their lofty pronouncements and continue to stir the pot while the economy continues to spiral downward because each of them receives a paycheck every two weeks, while many in our community do not and are waiting for us to ensure that they do," he said.
The recent news on the cover-over reduction is a classic case in point, the governor said.
"When the Department of the Interior informed us of the reduction of the cover-over advance, and that we should expect a $71 million dollar reduction, what did the Senate do? It suspended budget hearings," deJongh said.
"The solution is quite straightforward. Not necessarily easy, but necessary: you must either raise revenues, cut expenditures or do some combination of both. There is no more posturing in this time of decision making and, contrary to the wishes of some, we cannot defer the decisions to a chief financial officer or some federal overseer. It is the Legislature’s legal and moral obligation to pass a balanced budget."
The budget problem is not solely based on the cover-over reduction, he added.
"This budget hole was partly dug by their past inactions, their past votes and their unwillingness to deal with the reality that for too long has been right in front of us all. They have long known of the financial situation and this body has not passed one single revenue-raising measure. They have, however, found the energy to criticize me and my financial team but yet not offered any alternatives. … I have a job to do and I shall do mine; we need them to do theirs."
DeJongh said events since the Aug. 7 vote on the Hovensa amendment may have caused some of the lawmakers to reconsider their position.
"At this point, I believe that a majority of the Senate now understands the devastating consequences of the rejection of the proposed agreement; devastating for our people, for our government and for our entire community," he told his radio audience.
