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JONES: SENATE 'CANNOT SUPPORT THE TAX AS PASSED'

July 7, 2003 – Less than three weeks after passing parts of the governor's fiscal recovery package, but before the measures reach his desk for action, some lawmakers — including the Senate president — are having second thoughts about one item they approved: the "environmental user fee" of 2 cents per pound on most goods shipped into or manufactured in the territory.
Senate President David Jones says he's ready to repeal the measure, passed in special session on June 18. "In light of the public concerns raised, specifically by the business community, in terms of the cost that would be borne by the consumers," Jones said, "we cannot support the tax as passed." He said the key issue is the fact that the new "fee" would increase the cost of the goods.
Gov. Charles W. Turnbull proposed an "environmental use tax" (he called it a tax; the Senate rechristened it a "fee") of 2 cents a pound to help pay for court-ordered repairs to the territory's wastewater system. The measure immediately sparked public outcry.
Critics said adding 2 cents per pound would increase construction costs by thousands of dollars, even though certain building materials are exempted, and that it could ultimately derail other portions of the governor's fiscal recovery plan, notably his proposed capital improvement projects. (See "Opponents say 'two cents' tax not worth it".)
Jones said the Senate will have to find another revenue stream to fund the sewage collection and treatment system repairs, which the government wants to direct through the creation of a waste management authority. He said neither businesses not their customers should be forced to fund sewer repairs, because they are already struggling in a depressed economy.
"It's going to cost money," Jones said. "Yet, we could find a more equitable and less onerous way of funding that authority." While the 2-cent tax "would yield a lot of money for the government of the Virgin Islands," he said, "it will do serious harm to the private sector and indeed the consumers of the territory, something that I personally would not support."
Noel Loftus, a former St. Croix Chamber of Commerce president and owner of a flooring business, said he was happy to hear of Jones's change of heart. After reading the measure approved, Loftus said, he became even more convinced that the only thing for lawmakers to do is to repeal it.
"The money's going to the General Fund. No waste management authority has yet been created," he said. "But I think the fundamental flaw was that no analysis was done on the bill in the first place."
The governor has not indicated whether he intends to sign the fiscal recovery measures passed by the Senate on June 18 into law. The financial lynchpin of his plan, a bill authorizing the government to borrow another $235 million on the bond market, is currently before the Rules Committee, which is scheduled to take it up on Friday.

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