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LEAGUE: BUDGET IGNORES ECONOMIC CRISIS

The lack of a long-term fiscal recovery plan and shaky revenue projections make Gov. Charles Turnbull's first executive budget proposal too flimsy to deal with the current financial crisis, according to the League of Women Voters.
The LWV's highly critical assessment, which was released this weekend, comes just before the Senate Finance Committee begins its month-long budget hearings, which are scheduled to start Wednesday with Turnbull's top financial planners presenting an overview of the government's financial condition.
"The proposed FY 2000 budget is woefully out of balance and provides a meager sum for essential services to taxpayers," LWV President Erva Denham wrote. "The League urges a reconciling of the inconsistencies in the budget and a submission of realistic revenue and expenditure projections."
Due to worsening finances, Turnbull has already cut his original budget proposal by approximately 15 percent, from about $488 million to under $420 million. The nearly $70 million decrease is expected to result in pay cuts, layoffs and a reduction in government services.
"At this time, one of the most obvious shortcomings of the budget is the absence of a long-term plan for fiscal recovery," Denham stated. "And rumors of anticipated recovery and reorganization plans are, as of this writing, just that, rumors,"
The few cost-cutting initiatives the Turnbull administration has undertaken to stimulate the economy — such as a hiring freeze and curtailed use of government vehicles — completely ignore the private sector malaise, Denham wrote:
"The League is concerned that the proposed economic stimuli do not include any proposals designed to stimulate the private sector; rather, they rely too heavily on Government-sponsored capital projects which at best, produce short term gains."
The Turnbull administration must attempt to boost the private sector before the territory's businesses will be able to rehire laid-off government employees, she said.
The administration's government reorganization plan is expected to be presented to the Finance Committee at the end of its budget hearings later this month. The LWV, however, said the reorganization plan should be in place before the budget is approved.
"To be effective, any reorganization must take into account the staffing needs of the departments and agencies along with the reduction caused by attrition," Denham wrote.
Much of the Senate's budget work is done by the majority caucus between the end of the Finance Committee hearing and before a budget is passed by the full Senate.
The legislative and judicial branches should also attempt to reduce expenditures, the LWV suggested:
"The League remains very concerned that, while actions to reduce the expenditures of the executive branch are proposed, no concurrent action exists for the budgets of the Legislature, the Territorial Court, instrumentalities, boards and commissions."
Each of the three branches of government needs to examine its payroll, the LWV also recommended.
"The League notes that some offices, such as the Office of the Governor, have higher payroll costs for FY 2000 than in FY 1998, with 10 fewer positions in FY 2000," Denham wrote. "The executive branch should examine all government salaries over $40,000 with a planned reduction on a sliding scale, and call on the legislative and judicial branches to do likewise."
Turnbull's questionable revenue projections are no change from the inflated projections of past administrations, said the League.
"As in prior years' budget proposals, some of the major revenue categories are lacking in a solid foundation," Denham wrote. "How realistic is the projected collection of $32 million in delinquent real estate taxes? Has any assessment been made to determine what portion of these are, in fact, collectible?
"The projected increase in income taxes also does not reflect reality. By all accounts, business closings are increasing and more people are leaving the territory, especially on St. Croix."
The Bureau of Internal Revenue must collect aggressively for the administration to have any hope of meeting revenue projections, Denham stated.
"This should help to eliminate the necessity of making long-term loans for the operating expenses of a single fiscal year," she wrote.
Last month, Turnbull announced the government would likely seek a $100 million loan to fund payroll costs and other operating expenses.
"For the League . . . as well as for all taxpayers, the time is overdue for a realistic, specific, constructive plan formulated from realistic, specific financial data with an equally realistic and specific timetable," Denham concluded.

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