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Aug. 12, 2002 – Lt. Gov. Gerard Luz James II says his office will be forced to lay off staff if the full Senate upholds the action of the Finance Committee, which last week whittled the governor's proposed increase in his Fiscal Year 2003 budget from $1.5 million to $100,000.
Speaking at a press conference in his St. Thomas office on Monday morning, James angrily called the committee action "unconscionable." He said his office generates about $80 million annually.
"Expecting the office to function with a shortfall of approximately $1.5 million is unrealistic," James said. "It leaves me with no choice but to lay off many hard-working government employees."
Gov. Charles W. Turnbull had recommended a total budget for the Office of the Lieutenant Governor of $5.9 million, which represented an increase of $1.5 million over the current budget. In its markup of the executive branch budget on Wednesday, the Finance Committee allotted the office $4,460,248.
The committee decided upon the allocation without having taken testimony from anyone in James's office. It was the only government agency whose officials did not make a presentation before the Senators to set forth needs and answer questions. The situation came about because James failed to appear at two scheduled hearings, and Sen. Alicia "Chucky" Hansen, Finance chair, refused to let anyone else testify in his stead.
On July 11, James sent his chief of staff, Charles Parrott, to testify; Hansen said she would accept testimony only from James. At the rescheduled hearing on July 31, James again sent Parrott and Hansen again sent him away unheard. On Monday, James said it is his policy that the chief of staff should represent his office at budget hearings. He said the only reason he appeared in person last year was that he was without a chief of staff at the time.
Meanwhile, Hansen on Monday afternoon held a press conference of her own, at Gertrude's Restaurant on St. Croix. At that gathering she was critical of both James and Agriculture Commissioner Henry Schuster.
She defended her committee's action on the lieutenant governor's budget, saying the cuts were in made areas that it deemed to contain funding for unclassified positions which it saw as unnecessary.
As to the lieutenant governor's failure to appear before the committee, Hansen said she thought James was "intimidated by the process." She had made similar remarks to reporters at the budget hearing on St. Thomas last week where James was, for the second time, a no-show.
Hansen said then that at last year's budget hearings, each time a question was asked, James had to consult with his aides before responding. "With two months before election, I think that kind of exposure would make him uncomfortable," she said Monday.
Hansen also responded to what she said were critical remarks made by Agriculture Commissioner Henry Schuster Jr. about the Finance Committee cutting the governor's proposed budget for his department by $123,000, according to a report in The Avis. The money, intended to purchase two new tractors, was not appropriated in the Agriculture Department budget, Hansen said, but it was included in the 2003 Omnibus Bill as a line item.
At James's meeting with the news media, a bit of bright news surfaced. Maryleen Thomas, director of Banking and Insurance, said the territory now has a new insurance company, Gulf Insurance Ltd., writing homeowners' policies. And, she said, another, Westchester Fire Insurance Co., is expected to begin doing so later in the year.
Executive Insurance and Inter-Ocean Insurance Agency are the agents handling Gulf Insurance, Thomas said. A representative of Executive said later Monday that the agency is providing homeowners' coverage at a rate of 2.7 percent of assessed property value, which she said is "in the ballpark" for insurance rates. Gulf also writes commercial policies, she said. Efforts to contact a representative from Inter-Ocean were unsuccessful.
James said the most significant decrease will be felt by the Tax Assessor's Office, which falls within the Office of the Lieutenant Governor. The Tax Assessor's Office has generated about $170 million in revenues in the last three years, he said. Tax Assessor Roy Martin did appear before the Senate Finance Committee to discuss the funding specifically for his office.
James said the cuts in Martin's office will "dampen employee morale, and several individuals who have completed the hiring process must now be informed that funding for their positions has been deleted."
The lieutenant governor singled out Hansen and Sens. Donald "Ducks" Cole and Celestino A. White Jr., the majority bloc leader, for criticism. "After all their fussing about the needs of the tax assessor, it would have been reasonable to expect that the staffing needs would have been addressed as promised by the committee chair," James said. "Instead, the Finance Committee took away $335,979 in vacancies … This means the Tax Assessor's Office is left in the same position — and with a greater demand for service."
He cited the following as unfunded "critical" positions in the Tax Assessor's Office:
– Two commercial appraisers, one for each district.
– A territorywide coordinator.
– A surveyor for the St. Croix district.
– A technical assistant.
– An information systems manager.
Additionally, James said, eight other positions approved by the Office of Management and Budget were taken away from the Tax Assessor's Office.
The lieutenant governor also was critical of the senators' views on insurance. He said if the legislators were "truly concerned" about improving the Division of Banking and Insurance, which falls under his office, "they would not have turned down the request for a chief examiner of insurance, an insurance license examiner and two bank and insurance examiners."
James said his office would persevere, nonetheless. "Neither my staff nor I will sit idly by and allow another insurance problem like the Dome Insurance fiasco" in the 1980s "to arise in our midst," he said.
Noting that insurance premiums have increased since Sept. 11, he said, "Coverage is available, but the rates are just too high for the average hard-working person. I am trying to keep the rates at affordable levels."
James will be in office as lieutenant governor for little more than the first three months of Fiscal Year 2003, which begins Oct. 1. He is challenging Turnbull for the territory's top job with Thomas as his running mate, and the governor has tapped Sen. Vargrave Richards to share his ticket. The winners of the November general election will take office in early January.

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