Sept. 23, 2004 — With the start of the new fiscal year a few days away, the Senate Finance Committee Wednesday lost no time in throwing out taxes Gov. Charles W. Turnbull had proposed in his 2005 budget.
After starting an hour late, the committee dispensed with 27 bills, shifted money around in Turnbull's $670 million budget to fund the $9.2 million in raises for unionized government employees and created a new office to handle Carnival, effectively disbanding the present Carnival Committee.
Voicing strong opposition to new taxes, committee members voted unanimously to table the three Turnbull proposals. The bills were part of Turnbull's plan for generating extra revenues for the territory.
One bill would have established a $3-per-night hotel room environmental tax; another would have established a personal property tax on motor vehicles, motorcycles and watercraft; and the third would have established a cellular telephone user tax.
"It's a general consensus that this body will not consent to any more taxes at this time," Finance Committee Chair Sen. Adlah "Foncie" Donastorg said.
Sen. Luther Renee, who lost his bid for re-election in the primary election, agreed. "The people of the Virgin Islands cannot be burdened with more taxes," Renee said.
Sen. Norman Jn Baptiste said the administration was making it difficult for people to even afford cell phones, which have become "a necessity in this community." The cell phone tax bill called for individuals, firms, corporations or any entity contracting for cellular service in the territory to pay a monthly user tax of $3 per cell phone. The administration claimed that the cell phone tax would have raised a little more than $1 million in revenues each year for the territory.
"There are other ways to realize revenues for the government," Sen. Shawn-Michael Malone said, although neither he nor his colleagues specified alternative ways to raise such revenues.
The committee also reduced several appropriations in the governor's operating budget and miscellaneous sections to fund the $9.2 million in negotiated pay raises for union workers.
Stating that the budget would be a "performance-based" budget, Donastorg said appropriations to several governmental agencies were reduced. Explaining his plan, Donastorg added that the agencies' appropriations would be adjusted based on how they performed in their services to the public.
Appropriations were reduced from the following agencies/departments:
– the Office of the Governor from $6,695,470 to $6,552,255.
– the Office of Management and Budget from $1,339,332 to $1,318,991.
– the Office of the Adjutant General from $1,482,668 to $1,440,045.
– the Office of Veteran Affairs from $251,957 to $236,806.
– the Internal Revenue Bureau from $9,441,314 to $8,924,051.
– the Department of Finance from $7,323,788 to $7,0094,868.
– the Department of Human Services from $39,034,600 to $38,355,338.
– the Planning and Natural Resources Department from $6,031,408 to $5,969,008.
– the Department of Public Works from $33,215,736 to $32,594,011.
– the Department of Housing Parks and Recreation from $5,263,656 to $5,116,287.
– the Department of Tourism from $3,293,573 to $3,140,773.
– the Department of Labor from $3,895,734 to $3,681,427.
The committee also reduced the miscellaneous section of the budget by $5.3 million including the removal of $300,700 slated for Homeland Security and a reduction in the reimbursement to payroll from $5 million to $3.8 million.
Of the money gleaned from the reductions, $9.2 million will fund negotiated pay raises for the union workers, $150,000 will fund the Catholic Charities and $100,000 will go to the School Busing, Inc.
Turnbull had vetoed the pay raises for the union workers claiming that the government did not have the money to sustain the raises. But the Legislature overrode his veto in July.
Donastorg said he did not vote for the override because he also felt that the government did not have the money to sustain the pay raises.
"The money is there," Malone said. "It's just a matter of priorities."
All committee members said they were opposed to the lump-sum budget requested by Turnbull. Donastorg said they were seeking to create a modified line-item budget, which would include some lump-sum appropriations as well as line-itemed ones.
The senators voted 5-0 to approve the amended executive budget. Donastorg, Hill, Malone, Ronald Russell and Jn Baptiste voted for the measure. Sens. Roosevelt David and Renee were absent.
The committee approved 19 of the 27 budget bills before them, most of which appropriated money from various funds into the General Fund.
One of the measures approved an appropriation from the Tourism Advertisement Revolving Fund to Housing, Parks and Recreation; the V.I. Police Department and Public Works to fund various festival clean-up expenses; and, in the case of the Police Department, extra security presence. However, the measure was heavily amended to create an Office of Carnival Promotions within the Tourism Department. The director of said office would be in charge of St. Thomas Carnival, St. John July 4th Celebration and the Crucian Christmas Festival, either running them directly or hiring a committee to run the events.
The bill was also amended to allow agencies receiving grant money from the government to be audited retroactively to November of 1999. This section, sponsored by Donastorg, specifically applies to the V.I. Carnival Committee, which has claimed the government has no right to audit their books since they are a non-profit organization. (See the St. Thomas Source story "New Law Ends Senate-Carnival Committee Standoff").
An amendment by Sen. Ronald Russell to grant the Crucian Christmas Festival and the V.I. Carnival equal amounts of $275,000 each also passed. Turnbull's bill had called for $250,000 for the St. Croix event and $350,000 for the St. Thomas event. Russell said he saw "no reason for the disparity" between the amounts given to the two activities. The bill as amended was approved with a 4-1 vote. Sens. David, Malone, Russell and Donastorg voted for the measure. Sen. Louis Hill voted against it. Renee and Jn Baptiste were absent at the time of the vote. All the approved measures were forwarded to the Rules Committee, which will meet Monday to vote on the measures. Attending the hearing Wednesday were Sens. David, Donastorg, Hill, Jn Baptiste, Malone, Renee and Russell.
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