The Internal Revenue Bureau’s proposed $11.1 million Fiscal Year 2015 budget reflects a 14 percent increase over last year to fill numerous vacancies help collect revenue, IRB Director Claudette Watson-Anderson told the Senate Finance Committee during budget hearings Friday.
The large increase stands in sharp contrast to several years of back-to-back cuts for other agencies — such as the 4 percent cut to the V.I. Department of Agriculture’s budget, which the committee also heard Friday. But senators pointed out that any money spent in an effort to increase revenue is a benefit to all departments.
"I have always touted funding the agencies that bring in the revenues," Sen. Donald Cole said. ”We’ve got to fill the vacancies to the department that brings revenue to the territory,” he added later.
Watson-Anderson said she had devoted extra manpower to collecting occupancy tax from villa and condominium owners who rent out their properties online,"even thought we disagree with this body’s estimate" of how much there is to collect.
Over the last year and a half, some senators have cited $20 million or $10 million in potential uncollected tax. The Senate overrode the governor’s veto of a bill requiring IRB to devote two employees specifically to this task. (See Senate Seeks Budget Fixes in Related Links below)
Watson-Anderson has testified several times that there may be some money, but that most property owners do pay and there are not millions of dollars being left unpaid.
Sens. Myron Jackson and Tregenza Roach both followed up with Watson-Anderson about the amount of tax being under-reported. Jackson asked if IRB checked online for rentals to compare with tax payments.
Watson-Anderson said the properties are rented online, so IRB does check online and compare what is being offered for rent with who is filing taxes.
Wages and salaries for 162 employees comes to $5.87 million, while benefits, Social Security and Medicare taxes come to $2.5 million in the proposed FY15 budget. Supplies are budgeted at $118,000. Another $2.1 million is budgeted for professional services, leases and telephone and communications charges. Utilities are budgeted at $370,000.
V.I. Department of Agriculture could get 4 percent cut
When Agriculture Commissioner Louis Petersen presented his agency’s fiscal year budget request of $3.1 million Friday afternoon, he said a 4 percent cut would make it difficult for the department, adding to several years of cuts that have it them short-staffed in important areas.
"Since 2007, the Department of Agriculture’s personnel level decreased by 33 percent," Petersen said.
The department’s "capacity to provide timely land preparation services to producers has been curtailed by staff shortages and inoperable equipment," he said. "For example, we currently have 16 units of machinery — tractors, bulldozers, etc. — in the District of St. Croix, but we only have six heavy equipment operators." This slows down their work preparing land for farmers, among other issues, he said.
The territory’s two abattoirs are also a challenge. Both facilities need major repairs, which are on hold for budgetary reasons, Petersen said. The abattoirs could be shut down for noncompliance when the U.S. Department of Agriculture inspects later in the year, he said.
Despite budget woes, there is good news, Petersen said, reporting on work the department has done to increase water storage for farming, recent forestry land purchases, fruit tree programs and more. Over the last year, as a result of a collaboration with V.I. Energy Office, the Solential Energy Solutions and We Grow Food Inc., solar panels have been installed at the Bordeaux Farmer’s Market, saving over $500 per month, he said.
"Just this week we were told their utility bill was over $600 a month but now is $60 thanks to this project," Petersen said.
Agriculture’s budget includes $2.5 million from the General Fund, $655,000 in nonappropriated fees and other revenues, and $850,000 in funding under the budget’s miscellaneous section. Some $1.5 million is budgeted for wages and salaries; $757,000 for fringe benefits, Social Security and Medicare taxes; $150,000 for utilities; $226,000 for supplies; and $172,000 for other services and charges.
No votes were taken at the information-gathering budget hearing.
Committee members present included Graham, Cole, Jackson, Sens. Nereida "Nellie" Rivera-O’Reilly and Terrence "Positive" Nelson. Noncommittee member Roach also attended.