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HomeNewsArchivesLWV FAULTS EXECUTIVE BUDGET AS UNREALISTIC

LWV FAULTS EXECUTIVE BUDGET AS UNREALISTIC

Wouldn't it be nice if just once the government of the Virgin Islands presented the annual executive budget proposal with realistic revenue estimates? Wouldn't it be nice if the League of Women Voters' Government Structure and Operations Committee could assume that the balancing of this budget proposal was based on realistic, rather than overly optimistic and inflated, revenue estimates?
The League of Women Voters is gratified that the Bureau of Internal Revenue and the Department of Finance are, at long last, able and willing to collect delinquent taxes. But, if in fact $19 million, give or take, will be realized in Fiscal Year 2002, how does that justify an increase in collection of delinquent taxes of 60 percent in FY 2003? The balancing of this budget proposal depends on the approximate accuracy of such estimates.
More than 6 percent of the overall deficit of the V.I. government results from prior-year unpaid operating costs and expenditures in excess of revenue collections over the last eight to nine years. If the budget proposal for FY 2003 reflects inflated revenues from the collection of delinquent taxes, then once again operating expenses for the fiscal year will exceed available revenues.
Since a budget proposal is based on estimates and assumptions with side glances toward reality, the League of Women Voters will also assume that the government has already taken stringent measures to live within its planned FY 2003 budget. But if revenue collections do not meet the budget estimates, what then?
No provisions in the FY 2003 budget proposal appear to have been made for payment of an estimated $45 million in prior years' obligations. Will that figure continue to grow, year after year, because budget estimates lead to unrealistic appropriations of monies that are never realized? The Legislative branch of the Virgin Islands government cannot accept, and certainly must not condone, requests for appropriations that permit expenditures in excess of probable, if not impossible, revenue collections. Customarily, the Legislature adds its own wish list of appropriations, makes them available until expended and, by so doing, compounds the problem.
Once again, personal services and related fringe benefits account for more than 64 percent of government operating expenses. And once again, the League of Women Voters of the Virgin Islands knows it is whistling in the dark to ask that raids on the people's money end and that political largesse no longer be the order of the day.
With full recognition that the V.I. government is living beyond its means, real fiscal responsibility must direct and guide fiscal planning. Every time an annual salary increases by $5,000, the real cost to the government increases by nearly $2,000 to include fringe benefits. These latter now include the payment by the government of over 70 percent of the annual health insurance premium.
Perhaps among the executive branch budget's initiatives are its high hopes that the Federal Emergency Management Agency will in FY 2003 cancel the $10 million debt from 1995's hurricanes, thus accounting for it as a grant. However, the League wonders whether anticipated contributions from other funds are also inflated figures? Those for FY 2003 are more than 25 percent higher than the actuals for FY 2001.
Can the Matching Fund really double its FY 2001 contribution in FY 2003? Should the Road Fund, which the governor said in the media has a deficit balance, increase its contributions by 25 percent? Should the Insurance Guarantee Fund give up from its collected funds those received over the ceiling?
The League is still not without its own hopes and aspirations. High on the list are fiscal responsibility and efficiency. A very close third is cooperation through communication. While we do not expect a buddy system in our non-party political world, this should not preclude public officials' really working for the true common good.
The territory is, and has been, in financial trouble for some time. One-time shots in the arm such as bond proceeds in FY 1999 that increased the long-term debt for a short-term fix, the hoped-for generosity of FEMA, the collection of delinquent taxes from a river that must run dry, and the unwarranted contributions from special funds such as the Interest Revenue Fund and the Road Fund are not defensible in today's economy.
The League of Women Voters of the Virgin Islands does not presume to suggest to either the executive or legislative branch where cost containment must be applied. We only know what the figures tell us — that cost containment measures must be implemented now. The law only permits the government to operate in a deficit position if a disaster has been declared. Has it? If not, the law requires a truly balanced budget.

Editor's note: Erva Denham is president of the League of Women Voters of the Virgin Islands and writes on behalf of the organization.
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