June 19, 2003 – Though the Senate stuck to its guns and approved no borrowing by the administration, at the 11th — or more accurately the 23rd — hour Wednesday evening, they passed an amendment allowing the governor to tap the Insurance Guaranty Fund for up to $30 million.
The amendment came on the heels of a resolution petitioning the governor to implement several fiscal recovery measures, including urging the governor to negociate with Hovensa to pay up to $14 million of its property taxes in advance of the date due, a proposal put forth by Sen. Adlah "Foncie" Donastorg.
A resolution is not law, a fact not overlooked by Sen. Celestino A. White Sr., who had been railing at the majority senators for two days for taxing "the people" rather than the businesses. "Where is the plan? Call Nathan Simmonds (the governor's chief fiscal officer), and tell him you have no plan," White said.
Senate President David Jones said, "It was time to make a decision, and we did that." He said senators worked "with the courage of their convictions."
"While this is not perfect," Jones said, "I believe it is a good start, a move in the right direction in facing the fiscal crisis that confronts us."
The exact dollar amount expected from the new taxes and fees was not immediately available.
On an "infrastructure user fee," post auditor Annneta Adams Heyliger said she had not been able to calculate an exact figure because it involves so many things – the two cents a pound fee is levied on most items imported into the territory. Figures vary from at least $20 million to $40 million on what the fee will bring in annually.
The Senate's fiscal recovery figures say it will bring in $8 million in the fourth quarter of Fiscal Year 2003. It will, in part, generate revenues for the V. I Waste Management Authority, the cost of solid waste management and other urgent environmental requirements imposed by federal and local laws.
The amendment allowing the governor to use the Insurance Guaranty Fund will help ward off a payless payday next week, senators said. The amendment involves fund transfers from the insurance fund into an Economic Development Fund, which may be substituted with a letter of credit, surety bond or re-insurance certificate. It urges the governor to substitute up to the $30 million with a standby letter of credit, and to come to the Legislature should he decide to act on it.
Though the senators imposed some new taxes, they eliminated a proposed gasoline tax increase from 14 to 17 cents a gallon proposed by Turnbull.
The Senate still has not acted on the governor's proposal to float $235 million in bonds to finance the government's most recently calculated deficit of $152 million for FY 2003. The bill has been held in the Finance Committee where it may be considered in the next week.
The senators did approve a $55 million spending cut in the FY 2003 appropriation, but that amounts to $9 million, Sen. Lorraine Berry pointed out, as the governor had already cut $46 million. Senate majority members caucused with administration officials more than once during the long day, hammering out compromises. Senators said they had been assured by Gov. Charles W. Turnbull that the cut wouldn't force him to personnel layoffs.
Throughout the two long days of debate, the 25th Legislature shed its short and pleasant reputation for being civil to one another, as barbs flew faster than amendments.
Sen. Norman Jn Baptiste said of the session, "I think Bugs Bunny would have done a better job than we have done here today." Earlier Jn Baptiste had suggested the entire government be recalled.
Freshman Sen. Luther Renee, an economist, in contrast to the merriment around him, instructed his colleagues about the delicate tax bills which are never popular with anyone except any government's bean counters.
Renee cautioned that the taxes must be proportionate to the benefits they offer; for instance a road user's tax will benefit drivers. We have to be careful that when we tax, we do not make it so burdensome that the overall effect is detrimental, he said.
A St. Croix senator, Renee was philosophical about getting out of the current crisis, but not about St. Croix's immediate future. "We will get out of this financial crisis, some say management crisis; we've been in this before. But we have to have a plan for St. Croix. We have a 20 percent unemployment rate – we have to have a plan for the economy."
Following Sen. Louis Hill's lead, Sen. Ronald Russell said he will donate 10 percent of his salary to musical events at the Christiansted bandstand. "I intend to reduce my salary, and lead by example," he said.
White successfully offered an amendment to repeal the law giving the lottery director power of the Lottery Commission when there is no quorum of board members. Recently fired Lottery director Austin Andrews had this power in the absence of a sitting commission. White implored the governor to send down more board nominations "post haste."
The legislators also:
– Honored Alfred Heath with a resolution bestowing on him the V. I. Medal of Honor.
– Approved a bill to eliminate the statute of limitations on student loans.
– A bill to bring the territory's elections laws into federal compliance.
– A measure to allow more leverage in bringing a televised boxing match to the V.I., which supplants an earlier bill.
Included in the measures the Senate approved:
– A 4 percent "personal use" tax on all items imported for personal use, with the first $1,000 exempted from taxes. The senators exempted the first $1,000 so consumers wouldn't be subject to the tax when they order catalog purchases through the Internet. It is estimated to generate $750,000 in the last quarter of FY 2003.
– A highway user's tax increase from 11 to 16 cents per pound.
– A tire tax – $1 on tires 18 inches and $2 on larger tires. This is in addition to the $1 disposal fee already charged by tire dealers.
– Tractor-trailer tax increase – $50 up to 39 feet, and $100 above that.
– Doubling moving violation fees and the fines for not wearing a seat belt, which could possible result in at $1,000 fine for repeat offenders. The fee now ranges from $25 to $500.
– A one-year moratorium on new business licences on St. Croix, and a 50 percent reduction in existing businesses' fees.
– A $1 million annual payment from the West Indian Co. to the General Fund increased from the$500,000 it pays now. It was originally drafted at a $2 million payment.
– A 2.5 million appropriation to the University of the Virgin Islands technology park.
– Cuts in government overtime of 50 percent.
– A 50 percent increase in banking fees.
– A firearms licences increase from $50 to $75 for initial registration and from $100 to $150 for renewal.
All members except Sen. Raymond "Usie" Richards attended the session, which finally drew to a close about 10:30 p.m.
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