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Finance Committee Delays Vote on Supplemental Budget Bill

Feb. 14, 2006 — Supplemental budget requests from 14 government departments and agencies were scrutinized during a 10-hour Senate Finance Committee meeting Tuesday that concluded with senators deciding to delay a vote on the measure. The requests come as part of a $57.2 million supplemental budget bill submitted to the Legislature last Friday by Gov. Charles W. Turnbull.
When questioned by senators at the beginning of the meeting, Ira Mills, director of the Office of Management and Budget, said all requests outlined in the bill could be funded, since the government carried over a $69.8 million surplus from fiscal year 2005 into fiscal year 2006.
When contacted Wednesday morning, Finance Commissioner Bernice Turnbull further explained that since the rollover surplus has been added to the government's projected revenue figures for fiscal year 2006, the budget requests are based on excess revenues anticipated for the current fiscal year.
During Tuesday's meeting, Sen. Norman Jn Baptiste said he was concerned by this system, since the government may have to cut some of the budget requests if 2006 revenue projections "don't pan out." Jn Baptiste kept this idea in mind during several rounds of questioning, as he continued to ask testifiers how much they could afford to cut out of their budget if the government were to realize a shortfall of funds instead of a surplus.
Other senators also became concerned after Louis Willis, head of the Internal Revenue Bureau, said the surplus figure was initially $130 million but was adjusted because of projected losses within the Economic Development Commission. "Last year, EDC companies represented a $128 million revenue stream," Willis told senators. "However, since the federal government sent down its preliminary decision not to change the EDC regulations, which are greatly affecting the territory, we project a minimum loss in this industry of $80 million."
While Willis assured senators that these losses would be offset over the next fiscal year slightly by increased tax collections and a hike in gross receipts, along with corporate income and excise taxes, Nadine Marchena, assistant executive director of the Economic Development Authority, told senators that the authority would also be working to attract new business to the territory with aggressive marketing campaigns.
Marchena, who came to testify in favor of a supplemental budget request of $500,000, told senators that the EDA plans to go into communities on the mainland and make presentations to potential investors. "We also place ads in national magazines and do local publicity about our small business programs," Marchena said. "In this economy, we have to get the word out that the V.I. hasn't shut their doors to potential investors."
While most senators agreed that such marketing strategies are needed for the EDA, other senators were not impressed by Marchena's presentation. "In my opinion, you guys have already gotten a lot of money," Sen. Ronald E. Russell said. "We just appropriated $3 million in the miscellaneous section of our budget for you – that's a 300 percent increase from last year. I don't think you need any more."
George Phillips, acting commissioner of Public Works, was also extensively questioned Tuesday about the department's $4 million supplemental budget request. Phillips told senators that Public Works still had more than $7 million worth of road repair projects to complete throughout the territory and needed the money despite the $4 million appropriation made to Public Works for road repairs in the Omnibus Bill last September.
Attorney General Kerry Drue, who came in support of a $5.9 million request for the Justice Department, told senators that most of its budget is earmarked for repairs to prison facilities on St. Thomas and St. Croix. However, Donna Gregory, acting assistant director of the Bureau of Corrections, said a significant amount of funding would also go toward paying some of Justice's outstanding obligations – including a $44,000 debt owed to the Holsum bread company since 1994.
"You know what's sad – a lot of our money is going to pay people for mistakes that the government has made," Jn Baptiste said after Gregory's testimony. "We don't pay our vendors, or very likely we get out of compliance with something. That's just ridiculous, especially when we have things to pay off like $400 million in retroactive wages to government employees."
Also discussed Tuesday was a $3 million request from the Finance Department for the Government Insurance Fund, which goes to pay workmen's compensation beneficiaries. Finance Commissioner Bernice Turnbull said the fund is some $90,000 in the red because the cost of running the insurance program exceeds the contributions coming into the fund from various government agencies.
When asked how the department plans to prevent a similar situation from happening in the future, Turnbull said Finance is currently working on conducting an actuarial study on the operations of the fund from both the premiums and payment sides. "We have to look at the fund as a whole, decide what it's supposed to do, where the money is supposed to go, and put mechanisms in place to make sure we receive payments from our own government entities," she said.
At the end of the meeting, senators decided not to take a vote on the budget bill. "We really have to look at this before we decide on anything," Sen. Louis P. Hill, Finance Committee chair, said. However, Hill did not specify when the next meeting would be.
Present at Tuesday's meeting were Sens. Craig W. Barshinger, Liston Davis, Pedro "Pete" Encarnacion, Juan Figueroa-Serville, Hill, Neville James, Jn Baptiste, Usie R. Richards, Russell, and Celestino A. White Sr.
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