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Saturday, June 22, 2024


Under a five-year economic recovery plan presented to the Senate Finance Committee Monday on St. Thomas, the government would get out of the business of operating buses, running the V.I. Lottery and managing its fleet of vehicles and the territory's solid waste.
And the decision could be made to reduce the work week for some government employees and lay off others.
Through privatization and contracting out for services, the government would both cut its expenditures and increase its revenues, according to the report from the administration's Economic Recovery Task Force.
John de Jongh Jr. chaired the task force, created last year by Gov. Charles W. Turnbull, which drafted the plan. In testimony Monday, he warned the committee that the government faces such dire consequences as federal government intervention, cessation of investment, capital flight and default on payroll if it continues business as usual.
"Privatization is the buzzword in this plan," Sen. Violet Anne Golden, a member of the task force, said.
The plan "makes a compelling case that the fiscal crisis of the U.S. Virgin Islands cannot be ignored," Finance Committee chair Lorraine Berry said in a release issued by her office following the hearing.
The Five-Year Strategic and Financial Operating Plan set forth in the 300-page task force report recommends a three-pronged strategy:
– Reduce and control government spending,
– Increase revenue collections to control the deficit short term, and
– Implement private-sector initiatives to increase government revenues in the medium to long term.
In addition to moving Vitran, the lottery, solid waste management and management of the government fleet into the public sector, the plan also contains initiatives for other government agencies and for the reorganization of central services.
It recommends the creation of an Economic Development Authority. Turnbull has proposed to create such an entity, merging existing agencies such as the Industrial Development Commission, the Government Development Bank and the Small Business Development Agency.
According to deJongh, the government's accumulated deficit stood at $305 million at the end of fiscal year 1999. He said it will grow to at least $335 million and perhaps to more than $800 million, depending on the degree of implementation of the recommended measures. In the best-case scenario, the task force projects a budget surplus of $11.4 million for fiscal year 2004, he said.
Rudolph Krigger Sr., assistant to the governor for fiscal and economic policy, and two officials of Core International, the administration consulting firm that produced the plan, also testified. Krigger said the plan entails difficult decisions that will have to be made in order to improve the territory's economic outlook over the next five years. Among them are measures to reduce the government work week, reduce the size of the public payroll and lay off government workers, he said. Privatization in specified areas must occur, he added.
Further, Krigger said, "Attitudes within the territory must be amended in order to entice businesses to come to the community."
Core president Vinod Shrivastava stressed in his testimony that endorsement of privatization wherever possible is necessary to foster the growth of the private sector, according to Berry's release.
The task force recommended implementation of the measures over the next two years.
Berry noted that the administration's fiscal year 2001 budget is due to be submitted to the Legislature this month. The release from her office stated that, given "the historic problem of enforcement and implementation of recommendations," she asked Krigger whether the task force recommendations would "be visible" in the FY 2001 budget." The response, according to the release, was that "recommendations are continuously being implemented and will be seen" in the forthcoming budget.
The plan was originally to have been presented to the Finance Committee on April 18 but was delayed to April 27 at Government House request. Then Shrivastava asked that it be delayed a second time, saying he needed more time to prepare his presentation. It was then rescheduled for Monday.
Committee members present in addition to Berry and Golden were Senators Gregory Bennerson, Roosevent David, George Goodwin and David Jones. Sen. Alicia "Chucky" Hansen asked to be excused. Non-committee members present included Senators Donald "Ducks" Cole, Norman Jn Baptiste, Almando "Rocky" Liburd and Vargrave Richards.

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