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GOVERNOR MAKES PLEAS FOR BORROWING BILL

July 12, 2003 – Governor Charles Turnbull said there was little time left for the Legislature to act in order to keep the government's financial situation from caving in. The governor made his remarks at a Friday morning press briefing at Government House, about the same time the Senate Rules Committee was to begin considering a borrowing bill officials say they need to resolve the financial deficit, now set at about $152 million.
The Rules Committee rejected that request around 6 p.m. Friday, voting down Turnbull's $235 million plan. $100 million was earmarked to cover operating expenses of the government; the other $135 was set for use on capitol improvement projects to generate revenues for the V.I. treasury, the governor said.
In his remarks before cabinet members and individuals who came to witness a ceremony in which the governor nominated a new judge for the Territorial Court, Turnbull said the financial picture had improved, but not enough to sustain a growing deficit that might lead to insolvency.
"The government's cash flow has improved slightly due to June's revenues coming in higher than anticipated, and we have expended less in May and June than was projected," he said.
At the same time, he said, drastic measures were being undertaken to meet large obligations like the bi-monthly $4.2 million government payroll, steps the governor said could not be sustained.
"The payment of current year income tax refunds that were to begin has been deferred to later months to avoid the cash shortfall projected and to ensure that we continue to meet the payroll for our government workers," Turnbull said. "I have reluctantly directed the director of the Bureau of Internal Revenue and the commissioner of Finance to defer the processing and payment of income tax refunds until such time the Legislature approves the necessary funding."
If the Senate fails to act, the government will find itself in a position where it will no longer be able to meet its operating expenses and will still have to pay the deferred tax refunds, Turnbull said. "You all realize this course of action cannot continue indefinitely."
After the briefing, the governor's director of fiscal recovery underscored the fragility of the current financial balancing act. Nathan Simmonds said that agency heads from Roy L. Schneider Hospital said if they took an additional budget cut they would have to lay off 90 workers.
Attorney General Iver Stridiron has also said further curtailment of allotments to his agency would result in the layoff of corrections officers.
Simmonds also pointed to remarks made recently by Education Commissioner Noreen Michael that government budget cuts may lead to a drop in services that will leave her agency short of the requirements set by the U.S. Department of Education, which could lead to the loss of federal funds.

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