The governor’s financial team presented its proposed fiscal year 2025 executive budget to the Committee on Budget, Appropriations, and Finance on Tuesday. Senators were not happy with many of the projections.
Sen. Donna Frett-Gregory used the words “very concerned” several times during the hearing when referring to revenue projections. She said the team was not addressing revenue shortfalls and added, “The cycle continues.” She noted that funds had been appropriated this year for retirees to be paid retroactive pay owed to them, but the government has never paid that debt.
The budget, as presented by Kevin McCurdy, commissioner of the Department of Finance, included increased revenues from disaster recovery projects going into construction in the upcoming year. Frett-Gregory pointed out that because the projects were government projects, gross receipts taxes would often be excused.
Sen. Dwayne DeGraff said about the budget proposal, “The math is just not adding up for me.”
Sen. Carla Joseph asked how the team predicted hotel room tax collections would drop now that the Westin at Frenchman’s Reef was fully open.
Kimika Woods, acting director of the Office of Management and Budget, said that tax was now separated into two categories: hotel and non-hotel (such as Airbnbs). She said the collection for the former was predicted to be $21 million and the latter at $19 million.
McCurdy testified that the $1.4 billion budget presented in June had an appropriation from the General Fund of $896,893.010. Tuesday’s updated budget asked for a $935,210,110 appropriation from the General Fund. The remaining budget appropriations stayed the same: $97,949,177 for other appropriated funds, $28,940,041 in other non-appropriated funds, and $416,839,994 for non-disaster-related federal funds.
Joel Lee, director of the Bureau of Internal Revenue, clarified that tax refunds are being made for the tax year 2021 for returns filed in 2022.
Sen. Ray Fonseca criticized the eight percent increase in health insurance premiums for government retirees over 65, calling it “unacceptable” and “wrong.”
McCurdy concluded his written testimony, “I urge this body to limit any additional appropriations throughout the fiscal year, as traditionally done. Such practices often lead to unfunded mandates when the operating budget aligns with projected revenues.”
Sen. Franklin Johnson took exception to the remark, saying that everything should not fall on the shoulders of the legislators. He asked if the executive branch had been initiating any austerity measures. He received no answer. He added that the governor had given raises to his cabinet members through executive order.
Sen. Kenneth Gittens also wanted to see the government initiate some austerity measures. He questioned where the money appropriated for retroactive pay to retirees had gone.
Frett-Gregory, chairperson of the Senate Finance Committee, called Tuesday’s hearing “the exit meeting” for the public budget hearings. The Committee has had individual budget hearings all summer with particular agencies. She said the budget markup process would begin this week.
In a letter accompanying the budget book, Gov. Albert Bryan wrote, “We are well aware of the rising cost of living for Virgin Islanders. We are taking every opportunity to assist residents in increasing their household incomes and reducing their costs.”
Nathan Simmonds, director of finance administration at the Public Finance Authority, was asked about progress in getting the U.S. Congress to restore the rum coverall number to the number used to calculate the Government Employees Retirement System rescue plan. Simmonds said extensive lobbying continued, but GERS could face a $40 million deficit this year. The Committee focused on GERS in a later part of the hearing.
Sens. Frett-Gregory, Javan James, Marvin Blyden, DeGraff, Samuel Carriόn, Novelle Francis, Alma Francis Heyliger, Gittens, Joseph, and Johnson attended the meeting.
