83.2 F
Cruz Bay
Friday, April 19, 2024


Delegate Donna M. Christensen is to be commended for her courage in seeking to arrest the financial disintegration of the territory. The actions of the 25th Legislature are consistent with past performance but also have an "end of the road" quality to them. When you start collecting two years' revenue in one year, it does not take a financial wizard to ask what is going to happen in the second year. Like the bridge that cannot be sold a second time, these revenues are already collected. They will equal zero next year. These are signs of desperation.
This Legislature and governor always assume, as previous Legislatures and governors have assumed, that they can find another rabbit to pull out of the hat. There aren't many rabbits left, but one must give this group credit. Within a context of extraordinary long-term stupidity and recklessness, they have come up with a succession of clever short-term actions that have kept the ship afloat. Any reasonable observer, this one included, would have predicted it sinking long ago.
The V.I. government's pattern of fiscal recklessness has roots that go back a long way. The core of the problem was the conception of government as a jobs program for Virgin Islanders. Over the past two decades, however, repeated examples of financial irresponsibility and indifference to all aspects of life except those connected to the government payroll and privileged insiders have produced a situation that goes far beyond a "fiscal crisis." What is known as the "fiscal crisis" is part of a broader social, political, economic and moral/ethical decline that is driven by government failure at both the local and federal levels, as well as broader social and economic forces.
A fundamental question is: Will the proposed chief financial officer materially improve the situation? To try to answer this question requires that we ask an even more basic question: What problems are the proposed position and the accompanying fiscal system intended to address and solve? Most immediately, these actions are intended to address the structural deficits and growing debt of the territory and to introduce a strong and badly needed measure of transparency to the government's finances.
Nobody will openly disagree with these goals. As in most things, the devil is in the details — or, in this instance, in the assumptions. For at least two decades, successive V.I. governments have operated on the basis of the following assumptions:
1. It is essential to keep the current system and government structure going at all costs.
2. "They" (the federal government) won't let it collapse.
3. "We" aren't going to be around when it's time to pay the piper.
The first of these assumptions — fix it today and screw tomorrow — has produced the potential catastrophe that includes government inability to make payroll, the collapse of pension funds, the destruction of businesses, widespread personal bankruptcy, and the shutting of windows of credit.
The second assumption about the federal government may once have been true, but it misreads the nature of modern Republicanism and the indifference to suffering, particularly that of minorities, which is the hallmark of our times.
Finally, relative to the third assumption, the clock was bound to run out someday, and it appears to be Governor Turnbull's bad luck to be left holding the bag. But, it is just possible that he can find some new ways to screw things up and leave the mess for the next guy.
Within a context of a closing window of opportunity before a true collapse and of federal resistance to anything smacking of a "bailout" of the V.I. government, does Delegate Christensen's proposal hold out promise for real change? The single most positive sign is that all of the usual suspects in the government are against it. This would indicate fear that the CFO position will have real teeth and put the brakes on the rampant insiderism that now characterizes the public sector in the territory. If all government spending has to be approved by the financial officer, this action is a significant advance and can be expected to make a real difference over time.
The financing and implementation of a real financial system for the territory is an absolute prerequisite to substantive change. Nobody at present appears to have a handle on what the real numbers are, and the ongoing specter of budget officials responding "I don't know" to the most basic questions is simply not tolerable.
All of that being said, there are also substantial problems with this proposal, and they are almost all on the side of not going far enough. The position, as defined, is too narrowly drawn. This narrowness may be necessary to make the proposal politically palatable, but there is a need for review, audit and budget authority that will require an infrastructure and staff, qualities that go beyond the title of chief financial officer. It is unlikely that current budget or other staff can successfully perform these functions.
The selection and hiring process should be fully controlled by the federal government. Having the decision made by representatives of various Virgin Islands interests is likely to dilute the process and produce a compromise choice, one who will not have the mandate or the personal qualities required to take needed action. In addition, the appointee should not be a Virgin Islander. It is unfair to have someone who will be making the most difficult decisions constantly thinking "How am I going to live here?" There is a rule of perversity here: If a V.I.-dominated selection committee as constituted in the proposal "likes" a candidate, he or she is almost certain to fail.
Finally, there is a need to identify a pot of federal money to serve as a transition fund for those who are dislocated by the structural changes that need to occur. Such a fund will make it both possible and likely that substantive structural actions can be taken and that the territory can be put on the path to long-term recovery and prosperity. Delegate Christensen's proposal, as modestly drawn as it is, possibly represents a last chance for a "soft landing" and avoidance of a fiscal meltdown, which, within the context of Virgin Islands society, will also be a social and economic disaster.
Ignore the nay-sayers. Do it.

Editor's note: Management consultant Frank Schneiger has worked with V.I. agencies since 1975, most recently as consultant to United Way of St. Thomas/St. John. He was one of the founders of the St. Thomas/St. John Youth Multiservice Center.
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