83.9 F
Charlotte Amalie
Monday, September 25, 2023
HomeCommentaryOp-edCorporate Welfare Is Alive and Flourishing in U.S.V.I.

Corporate Welfare Is Alive and Flourishing in U.S.V.I.

The vote to approve the operating agreement for the sale of the idle St. Croix refinery was an example of the type of corporate welfare not seen since the George W. Bush administration handed sweetheart deals to the oil and gas industry during his time in office. There are several issues I would like to raise in this editorial.
The first problem with this deal is, this deal does little in the way of creating jobs on St. Croix over the life of the deal. There is no question there will be some jobs created as a result of capital improvements and expansion of the facilities, but it falls far short of the type of job creation one would expect given all the financial incentives handed out by the administration.
The second problem with this agreement is the short sight approach of this deal. This approach focused on the financial benefit to the territory short term, while completely ignoring the fact, this deal does not provide significant financial benefits that will contribute to the territory’s long term financial stability. The mind blowing amount of tax concessions made to a giant multi-national corporation raking in billions in revenues every year is beyond my comprehension. The largest potential benefit to the territory given the lack of jobs produced by this deal was the tax revenues which were negotiated away.
The third problem with the way this deal was handled was the approach taken in negotiations which placed the territory in a weak bargaining position. The approach which should have been taken was to allow all parties bidding for the refinery to submit operating agreement proposals with the bids because the far greater potential for financial benefit to the territory was encompassed in the revenues generated by the operating agreement. The fact that the administration only considered this one proposal did not create an environment to get the best offer in the bidding process because the long term financial gains of any potential operating agreement could far exceed the short term financial benefits.
Where were the senators that the people of St. Croix voted into office to represent them? It appears to me, there was a complete failure by those entrusted to represent the interest of the people of St. Croix. Every senator from St. Croix that voted for this agreement should be taken to task in the next election for failing the voters of St. Croix. While this deal produces some short term financial benefits to the territory, there was an even greater opportunity to place the territory on a much stronger financial footing that was squandered away with the vote to accept the agreement. What the legislature simply did was just kick the can down the road.
The financial crisis in the Virgin Islands is far from over. There are significant structural problems with the Virgin Islands economy that can only be solved with increased tax revenues such as the revenues bargained away in the operating agreement for the sale of the refinery on St. Croix. The people of St. Croix deserve representation that is interested in serving their best interest, who do not put their personal agenda ahead of the people’s business. When there are individuals who are willing to place their priority in personal agendas, such as legalizing weed, over fighting for jobs on St. Croix, it is time for the people to rethink who they want to represent them.
It is time for the people of St. Croix to call for a referendum to require the Virgin Islands Legislature to approve the creation of local governments. By creating a local government which sole function is working in the best interest of the people of St. Croix, the people of St. Croix can ensure their interest will be safeguarded in the future.
Editor’s note: Eddison T. Walters is a business professor, MBA, ABD Doctor Business Administration, president of Walters Global Business Resources LLC and co-host of "Economic Round Table, The Market Place" on WSXT

Print Friendly, PDF & Email
Keeping our community informed is our top priority.
If you have a news tip to share, please call or text us at 340-228-8784.

Support local + independent journalism in the U.S. Virgin Islands

Unlike many news organizations, we haven't put up a paywall – we want to keep our journalism as accessible as we can. Our independent journalism costs time, money and hard work to keep you informed, but we do it because we believe that it matters. We know that informed communities are empowered ones. If you appreciate our reporting and want to help make our future more secure, please consider donating.