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SENATE'S FISCAL CRISIS PLAN REMAINS TO BE SEEN

June 17, 2003 – If the Senate has a comprehensive plan to meet the territory's fiscal crisis, it was not evident by 8 p.m. Tuesday, when the day's full session was adjourned until 9 a.m. Wednesday after the lawmakers approved two bills, one amendment and four nominations.
Senators say the whole plan will fall in to place Wednesday after the remaining five bills and two resolutions have been acted upon. Sens. Louis Hill and Shawn-Michael Malone said after Tuesday's session that "the gap will be closed."
Both said they do not approve of any borrowing at this time. "I support borrowing for proper purposes, capital improvements, but not to pay bills," Hill said. But he also said that the looming fourth-quarter (July-September) deficit for Fiscal Year 2003 will be resolved in the Senate's proposals.
Senate President David Jones said the 25th Legislature has "a workable compromise to ease the stress in the General Fund, and in the coming months we will put policies in place to make sure we don't return to this situation."
According to Jones, the Legislature has produced a plan that "reduces spending, increases revenues, provides a mechanism for financing and makes sure the medicine applied will not kill the patient."
Just what that mechanism is remains to be seen. Members of the Legislature and the administration held closed-door meetings last week seeking to resolve differences and come up with a plan acceptable to both branches of government for addressing the fiscal crisis. Little information on what was discussed was forthcoming from any of the participants. (See "2nd Senate-administration session is Wednesday".)
Although Jones commended his colleagues for "sticking together and weaving a tapestry resulting in measure to address the fiscal challenges," little "sticking together" was apparent Tuesday.
The Senate recently patted itself on the back for "working together in unity" when all 15 legislators signed a letter to Gov. Charles W. Turnbull asking him to rescind last year's hefty pay increases to exempt government employees. They made his doing a condition of their taking up the governor's bill calling for a $235 million bond issue to deal with the territory's financial woes.
On Tuesday, things were back to normal, with votes being decided on a majority/minority basis. The heretofore refreshingly amicable atmosphere in the 25th Legislature appeared to have come to an abrupt halt, as senators directed barbs at one another.
Minority pay-cut proposals rejected
The minority bloc tried unsuccessfully first to lower senators' salaries by 10 percent and then to reduce the salaries of all senators, Territorial Court judges, the governor and the lieutenant governor by 10 percent.
The first was on a motion by Sen. Norman Jn Baptiste which was contested by Sen. Emmett Hansen II, who said senators cannot act on measures affecting their salary while in term. Jn Baptiste said it was legal if all members voluntarily approved the measure. Hansen asked legal counsel Yvonne Tharpes to give an opinion; however, she did not.
The two proposals received identical 5-9 votes. Approving them were Sens. Baptiste, Adlah "Foncie" Donastorg, Carlton Dowe, Almando "Rocky" Liburd and Celestino A. White Sr. Voting against them were Sens. Lorraine Berry, Douglas Canton, Roosevelt David, Hansen, Hill, Jones, Malone, Luther Renee and Ronald Russell.
Donastorg again brought up his measure to reduce the Senate size to nine members from the current 15; and it again failed, this time on a 6-8 vote. Voting in favor were Sens. Baptiste, Berry, David, Donastorg, Hill and White. Voring against were Sens. Canton, Dowe, Hansen, Jones, Liburd, Malone, Renee and Russell.
The Senate actually lowered one of the governor's proposals for increasing the portion of employee contributions to health insurance premiums. The governor had proposed a 60/40 government/employee formula; the Senate made it 65/35, which Jones said would "ease the burden on the General Fund, and not overly burden the employees." Currently, the ratio is 73/27.
Hill was incensed by the amount of money the government spends on health insurance. "We spend 10 percent of the budget — $68 million," he said. "When are we going to question why? It's unreasonable."
It's Hill's belief that the legislation mandating the insurance, passed by the 22nd Legislature in 1998, must be amended. He said the legislation was modeled after similar law in Washington, D.C. "Why choose the place with the highest insurance in the U.S.?" he asked. Why not model it after Puerto Rico's legislation which is the "lowest in the nation"?
The session's scheduled 10 a.m. start was delayed by a demonstration staged by some of the governor's exempt employees. The employees subsequently attended the day's proceedings in the chambers along with members of the governor's financial team including Attorney General Iver Stridiron; Kenneth Mapp, Public Finance Authority financial and administrative director; Karen Andrews, chief labor negotiator; Alric Simmonds, the governor's deputy chief of staff; and Kent Bernier, the governor's assistant for economic affairs.
Internal Revenue Bureau director Louis Willis arrived a short time later bearing an orange that had fiscal significance. A report published in Tuesday's V.I. Daily News said Willis will resign if the $235 million bond issue, or something close to it, is not approved so that he can pay income-tax refunds.
The reported quoted Willis as calling the governor's offer to impose pay cuts of 2 to 10 percent on the exempt workers for half a year "peanuts." He said: "We need to feed the whole territory. We need to squeeze the orange and make sure everybody gets some juice."
Willis confirmed on Tuesday that he will resign unless the borrowing is approved. In response, he received much chiding from the senators.
Appropriations bills approved
The senators passed two bills, neither of which contain any revenue-cutting measures. One of the bills funds critical sewer and wastewater collection systems.
Bill No. 25-0035 adds the Water and Power Authority to the list of the $500,000 appropriation from the unused portion of the $15 million bond proceeds authorized under section 1(a) of Act 6297 to the Government Employees Retirement System for the early retirement of hazardous duty employees. The measure has been strongly opposed by a GERS advocate group.
It also provides a $600,000 appropriation from the Land Bank Fund to the Department of Public Works for a public cemetery on St. Thomas.
And it provides for a $2.3 million appropriation from the Union Arbitration Award and Government Employee Increment Fund as a contribution to the General Fund for FY 2003.
Bill No. 25-0036 in its first section appropriates $5.4 million from the General Fund to be paid by July 31 to the Public Works Department for repair and maintenance of wastewater collection and treatment systems territory-wide; another $4 million for the same purpose to be paid by Sept. 30; and another $750,000 to DPW for emergency repairs to the systems.
Section 2 of the bill extends the filing deadline for the V.I. Tax Study Commission to submit its first report from Sept. 30, 2001, to Nov. 30, 2003; it also changes the expiration date of the term on the commission from Sept. 30, 2002, to June 30, 2005.
Section 3 increases the appropriation from the Indirect Cost Fund for FY 2003 operating expenses – including salaries and other purposes – of the Office of Management and Budget, Personnel Division, Property and Procurement Department and Finance Department from $1.3 million to $2.5 million, increasing the total fund from $2.7 million to $3.9 million.
Section 4 increases the appro
priation from the Transportation Trust Fund as a contribution to the General Fund from $10 million to $11.5 million.
In the day's first order of business, which kept the lawmakers busy until early afternoon, they approved the nominations of Roy Anduze and Daryl Lynch to the WAPA board, the renomination of Carver C. Farrow Sr. to the GERS board and Liston A. Davis to the Board of Education.
All senators attended the session except for Sen. Raymond "Usie" Richards who was off-island.

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