Although it is rapidly going bankrupt, the Government Employee Retirement System will make a bonus payment to V.I. government pensioners, spending $1 million on small cash payments to a large group of voters, thanks to a 2009 law.
The money is not part of the pension fund or related to retiree’s government service. It is simply a cash gift to former government employees from the V.I. government – or rather, thousands of small cash gifts.
GERS’s announcement of the pre-Christmas cash gifts refers to the payment as an "annual bonus." That’s technically accurate, but the "annual bonus" was created in 2009 by the V.I. Legislature. And it is not a "bonus" in the sense of a reward for good work, but just a cash gift.
Sen. Shawn-Michael Malone sponsored the legislation, along with then-Sen. Carlton "Ital" Dowe. A slew of now former senators cosponsored it. The legislation [Act 7070] actually calls for $2.27 million from lottery revenues to be spent on the cash gifts to retirees but has been limited by available lottery revenues, and is about $1.1 million this year.
In recent testimony to the Senate, GERS Administrator Austin Nibbs said there were roughly 8,362 pension beneficiaries as of Sep. 20, 2012 – and all of those would have more than a year in the system now.
For the sake of argument, assume that 6,000 of those are at least 60 years of age. The true number may be a little lower or higher, but probably not dramatically. That would mean each pensioner will get a cash check for $188 – minus a 25 percent withholding tax, about $141. This is a fairly wild estimate – perhaps the checks could be as high as $200 or as low as $125.
That is a nice little check before Christmas that I’m sure those 6,000 voters – I mean pensioners – really appreciate. But it is not something they earned; nor is it something they could be said to "need" in any real sense, beyond the fact that we all need more money than we have. It’s simply a Christmas gift from the government to thousands of individuals who happen to belong to a demographic group that tends to turn out to vote in larger numbers than the population as a whole.
But every government agency has seen back-to-back budget cuts. We have a government owned hospital on St. Croix that is teetering on the edge of financial collapse. We have a Health Department that has been cutting services for several years and a population that needs more and more services. We need more ambulances on St. Croix. Schools have laid off teachers for financial reasons in recent years and are struggling with staffing, budget cuts and innumerable problems with school maintenance.
The prison system and Police Department are both struggling to comply with federal consent decrees. The Office of the Public Defender is swamped, understaffed and underfunded. V.I. Superior Court officials warned during budget hearings that they could not function with their budget and asked for an additional $13 million – which it did not get. And even central roads like Queen Mary Highway have dangerously deep potholes, while some roads are nearly impassable.
In the midst of all this, even as the government scrambles to deal with reduced revenue projections for the upcoming year, are small cash gifts to former government employees (and reliable voters) really the best use of this million dollars in lottery gambling revenue? Obviously not.
Has anyone at the Legislature, Government House or GERS suggested forgoing the cash gifts to every member of this block of older voters and, instead, say, use it to keep St. Croix’s only hospital open? Of course not.
And this is why we cannot have nice things.