July 21, 2003 – The Economic Development Authority asked the Senate Finance Committee on Monday for a Fiscal Year 2004 budget that's up by $1.1 million — or nearly 69 percent — from its FY 2003 appropriation.
Frank Schulterbrandt, EDA chief executive officer, told the committee that if his agency is expected to continue bringing new businesses into the territory, it must have the funds to work with.
In the first nine months of this fiscal year, he said, his staff processed 58 new applications, 23 of them for businesses on St. Croix. He said they represent a potential of 588 jobs with $26.5 in payroll and $18.8 in capital investment in the territory.
The EDA is at an all-time low in funding with an all-time high in work being performed, Schulterbrandt said. He said his application unit in 2002 processed double the number of applications in the previous year, with no increase in personnel. And he said the numbers will be up significantly again for 2003.
The agency's FY 2004 request is for $2.7 million — up from the FY2003 appropriation of $1.6 million. The EDA encompasses the Economic Development Commission (formerly the Industrial Development Commission), the Government Development Bank, the Small Business Development Agency, the Industrial Park Development Corp. and the Enterprise Zone Program.
The EDA markets the territory as a favorable investment location with its tax benefits, conducts hearings for new applicants, investigates their backgrounds, and monitors beneficiaries for compliance with EDA requirements such as the number of Virgin Islanders the companies must hire. The authority does target marketing with its "EDA Callings" program. Schulterbrandt said the program was allotted $200,000 in FY 2002, and nothing at all in FY 2003.
The compliance unit currently has five employees, and "the staff is worn out," he said.
The senators, having just approved new borrowing and taxation to deal with the territory's fiscal crisis, didn't cotton to Schulterbrandt's way of looking at the situation and questioned him extensively.
"It is not responsible at this time to pass a budget that exceeds the previous year's," Sen. Shawn-Michael Malone said.
Sen. Ronald Russell questioned why the Government Bank even exists, since it gets no funding from the administration that created it. "Since the bank's mission was never fulfilled, why don't we eliminate it?" he asked.
Schulterbrandt said the bank's micro-loan program makes it worth while. "It has an excellent 90 percent payback rate," he said. But, he added, "We are currently awaiting $2 million from the Public Finance Authority to finance the loan program."
According to Schulterbrandt, the Enterprise Zone Program is his "biggest headache." He said the program, designed to help St. Croix businesses, was transferred to the EDA from the Historic Preservation Commission in February 2002. Since then the EDA has held public meetings on the rules and regulations of the program, and the applications are ready to go. However, he said, the "effort has been stymied by the inability of the Enterprise Zone Commission to establish a quorum at its meetings."
He added: "It is my personal opinion that the EDA can administer this program without the need for a commission, and we can prepare the necessary amendment to achieve this end."
Donastorg opened the FY 2004 budget hearings earlier this month even though Gov. Charles W. Turnbull has not sent the Senate his proposed spending plan. He noted at the beginning of Monday's meeting that Legislatures in the past have proceeded with hearings without the governor's budget in hand.
Turnbull by law was to send down his proposed budget by May 31. He said he would not do so until the Senate addressed his series of fiscal recovery bills, including one to borrow another $235 million. That one was passed last week; the others were approved earlier this month.
Donastorg noted on Monday that the government can spend only what the Legislature approves, although the administration can allocate the funds as it sees fit. This remark was apparently in answer to a comment about his proceeding with the hearings without the official budget.
Committee members present Monday were Sens. Donastorg, Louis Hill, Malone, Luther Renee and Russell. Sens. Roosevelt David and Norman Jn Baptiste were excused. Sen. Almando "Rocky" Liburd, a non-committee member, also attended.
Publisher's note : Like the St. Thomas Source now? Find out how you can love us twice as much — and show your support for the islands' free and independent news voice … click here.
