Aug. 21, 2006 – A supplemental budget request of $34.4 million recently sent down by Gov. Charles W. Turnbull was the center of discussion during Monday's budget wrap-up hearing, which was designed to give members of the government's financial team a chance to present final comments on this year's $749.4 million executive budget.
While Sen. Louis P. Hill, chairman of the Finance Committee, said there would be another hearing held on the supplemental budget bill, senators spent about eight hours questioning Office of Management and Budget Director Ira Mills, Internal Revenue Bureau Director Louis Willis, and Finance Commissioner Bernice Turnbull about the new appropriations, and how much money is expected to come in at the end of Fiscal Year 2006.
According to Mills, revenues projections for this fiscal year are higher than expected, due to an increase in corporate, individual income and gross receipts taxes – bringing revenue projections up from $727 million to $750.6 million. The extra money, he said, would be used to fund the "critical needs" of various departments and agencies, including utility costs, technological improvements, and funding shortfalls with the Education and Human Services Departments.
In response to questions from senators about why additional money has come in so close to the end of the fiscal year, Willis explained that tax collections usually increase during the third and fourth quarters. "The only way to get a handle on things is to come back after the third quarter and to revise the revenues," he said.
Documents submitted by the financial team indicate that net income taxes are supposed to jump from a projected $421.2 million to $472.4 million by the end of the fiscal year – yielding approximately $690.5 in total taxes and $702.8 in total government revenues.
Willis added that revenue projections for FY 2007–now pegged at $749.4 million–would similarly be revised at the end of the next fiscal year.
However, Nathan Simmonds, head of the financial team, said that there would be no adjustments made to FY 2007 projections until new real property tax bills have been issued, and the impact federal regulations will have on the Economic Development Commission's tax benefits program has been assessed.
Reverting back to the issue of the supplemental budget, Mills said the money, if approved, would have to be expended by Sept. 30–which, he said, is a realistic goal since many of the appropriations are needed to cover obligations for 2006. "These are things that the departments and agencies requested for this fiscal year that were not included in the budget, and therefore not taken care of," he explained.
He said other appropriations also have to be made, such as $17 million for the Education Department, or federal funds will be lost.
In another supplemental budget bill approved earlier this year, more than $10 million was earmarked for programs within Education and Human Services. At the time, Mills explained that the money would be reimbursed by the U.S. Department of Education once a third-party fiduciary is put in place.
Mills and Education Commissioner Noreen Michael have explained at previous Senate hearings that the money is being borrowed against a $22.5 million grant awarded to the department for 2005. According to Mills, the money has to be obligated before Sept. 30, or the funds will revert back to the federal government.
Other appropriations included in the supplemental budget are:
–$5.6 million to fund the difference between negotiated and actual salary increases for both unionized and non-unionized government employees.
–$2 million to Human Services for the development of the Herbert Grigg Home for the Aged, along with the continuation of preschool and residential services.
–$2 million to the V.I. Water and Power Authority for utility payments for various government departments and agencies.
–$1.56 million to increase contributions to the Molasses Subsidy to cover outstanding obligations for FY 2005, and other prior years.
–$1.5 million to the Bureau of Information Technology for the development of a communication infrastructure facility, and for operating supplies.
–$1.4 million to Human Services to cover federal funding shortfalls until a third-party fiduciary is implemented.
–$1.3 million to the Police Department for overtime costs.
–approximately $1 million to the Office of the Adjutant General to repair armories on St. Thomas and St. Croix and to repair emergency operations centers on all three islands.
–$280,000 to the Health Department to pay three mainland facilities for treating local mental health patients.
–$500,000 to the Health Department to assist with AIDS program services.
–$180,000 for the Women's Coalition of St. Croix for operating expenses.
–$93,160 to the Division of Personnel for equipment and materials needed for the reconfiguration of a multipurpose training room.
The bill also distributes money from different government funds to allow for the expenditures. This includes:
–a $7.6 million contribution from the Interest Revenue Fund to the General Fund.
–an increase in contributions from the Transportation Trust Fund (from $13 million to $19 million) to the General Fund.
The bill also allows for $5 million included in the Sustainable Agriculture Act, passed earlier this year, to be available until expended, and requires that deposits made to the Portable Water, District Streetlight, and Public Road funds be made available on a quarterly, instead of an annual basis to the WAPA.
Present during Monday's meeting were Sens. Roosevelt C. David, Liston Davis, Juan Figueroa-Serville, Louis P. Hill, Neville James, Norman Jn Baptiste, Terrence Nelson, Ronald E. Russell and Usie R. Richards.
Sen. Pedro "Pete" Encarnacion was absent.
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