Sept. 21, 2006 – Vision, a publication of the Government of the U.S. Virgin Islands, says in the "Governor's Voice" that the increase in revenues appearing in the 2007 budget is "a sustainable, recurring revenue increase." In the 2007 proposed executive budget are line items intended to support this statement, but how reliable is this support?
If revenues are recurring at an increased rate, why is it necessary to balance the fiscal year 2007 budget by raiding the Internal Revenue Matching Fund, Interest on Debt Service Reserve, The Transportation Trust Fund and the Insurance Guaranty Fund?
The approximately $47 million of the Internal Revenue Matching Fund could well be used for the long postponed capital projects for which the fund was originally intended, or used for annual renovation of public buildings, particularly the public schools.
If the Debt Service Reserves Fund, is, as stated in the July 28, 2006 edition of The Daily News, over-appropriated by $14.6 Million, shouldn't any "surplus" in the Interest Earned on Debt be used to meet the needs of this apparent over appropriation? Don't the roads in the territory need the revenues deposited into the Transportation Trust Fund, specifically dedicated for the repair and maintenance of roads? How much is really enough to maintain as a cushion for the Insurance Guaranty Fund?
The budget for fiscal year 2007, proposed by the legislature, is almost one-third (33%) more than that enacted for fiscal year 2006; that proposed by the governor for 2007 is about one-fifth greater. Expansion of expenditures is not easily reversed. Is this unexpected, unanticipated increase in revenues sustainable? What might the impact be on fiscal year 2008? Doesn't fiscal responsibility require long-range plans? How advisable is it to budget a government in a vacuum, one year at a time?
President Erva A. Denham
The League of Women Voters of the Virgin Islands
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