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Tuesday, October 4, 2022
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ADMINISTRATION FINALIZING RECOVERY PLAN

The joint Virgin Islands-federal economic recovery task force is finalizing its five-year plan to address the territory's financial crisis, Office of Management and Budget Director Ira Mills said Wednesday at a Senate budget hearing.
The federal government expects the plan to completed by the end of this month, Mills added.
Mills discussed the task force's activities after Senate Finance Committee Chair Lorraine Berry asked him what Gov. Charles Turnbull and his financial planners were asked to do when they met with White House and Department of Interior officials last month.
"The meeting in Washington asked the Virgin Islands government to produce benchmark measures for the federal government's consideration," Mills said. "The U.S. and V.I. team met here in the Virgin Islands, and the lawyers were working on a set of benchmarks that we can live with."
"I think they're still in the process of fine-tuning the wording of that benchmark process," he added.
Asked by Berry what some of the "benchmarks" were, Mills said: "Certain things evolved in that, one, we had to reduce the costs of our government. . . I think the amount that was discussed was around 10 percent We also indicated that we were making additional efforts to go above that 10 percent reduction."
Turnbull and his financial planners also committed to establishing an attrition program and a hiring freeze for non-essential personnel, Mills said.
"To the extent that the federal government is going to help, we need to demonstrate positively that we are helping ourselves, Mills said. "And the way we can do that most beneficially to us is the reduction of our costs, because of the size of our government relative to our tax base," he said.
Berry asked whether the federal government is still considering forgiving $190 million in FEMA loans made to the territory.
"They have indicated they won't even consider it if we don't take some of these steps," Mills responded.
He also said planners were working out details of a Virgin Islands investor conference that may take place later this year.
The Industrial Development Commission and its tax incentives need to be reviewed, he said, and the question is whether to wait for the review before inviting investors or to bring them in earlier because some of them might not need, or qualify for, IDC benefits.
Many potential investors have told the Turnbull administration tax incentives were not the most important factor in relocating to the territory, Mills said.
What investors really want, Mills declared, is a government that provides service on time, and that will decide in a timely manner on their applications for licenses to do business here.
From a tax standpoint, the government would benefit substantially from investors who didn't seek IDC benefits, Mills added.

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