April 23, 2007 — Extensive testimony and documents provided Monday by members of the governor's fiscal team did nothing to quell senators' concerns about a supplemental budget bill recently submitted to the Legislature by Gov. John deJongh Jr.
Instead, after about eight hours of debate, senators requested that additional information — needed to back up some of the appropriations included in the bill — be submitted by next Monday, when another Committee of the Whole hearing will be called to continue discussion on the proposal.
As currently written, the bill is designed to balance this year's executive budget and fund some of the government's outstanding financial obligations without appropriating additional money from the already over-extended General Fund.
Instead, to cover the expenses, about $14 million would be taken from a $40 million appropriation included in the miscellaneous section of the fiscal year 2007 budget. The remaining amount, some $26.1 million, would go directly to the cash-strapped Government Employees' Retirement System to cover various expenses.
Senators opposed the proposal, saying that cutting the appropriation would result in less money going to GERS, currently plagued with an estimated $1.2 billion unfunded liability.
However, Nathan Simmonds, head of the governor's fiscal team, explained that the appropriation was never intended to cover the retirement system's financial obligations, but rather to pay off a portion of the debt-service requirement on a proposed pension-obligation bond.
"Since the bonds are not going to be done in this fiscal year, the remainder of the money will be used to pay budget appropriations and the appropriations included in this bill," Simmonds explained.
Turning their attention away from the proposed shift of funds, senators asked members of the governor's fiscal team to justify a majority of the supplemental budget appropriations — primarily questioning why the government still has outstanding debts dating back to the 2004 fiscal year. A few also challenged Simmonds' description of the territory's finances, which shows a $46.5 million projected revenue shortfall for the 2007 fiscal year.
"I don't see a $46 million shortfall," said Sen. Neville James. "I don't think we're as badly off as what has been bandied about by the community."
Figures submitted by fiscal team members, disagree, however.
"Our analysis of revenue collections through Feb. 28, 2007, indicates that the government continues to experience a cash-flow shortfall in the General Fund," Simmonds said. "Tax and other revenue collections are down 14 percent below the same period last fiscal year. While this is a slight improvement over what we reported last month, we are very concerned and continue to urge caution in the allocation of our scarce resources."
While Simmonds acknowledged that the government has, over the past three fiscal years, experienced an accumulated surplus of funds, he also explained that a large portion of the money has already been obligated, intended to go toward outstanding appropriations and other burdens.
"I would also note that in each of these fiscal years … tens of millions of governmental obligations went unfunded," he added. "Cumulatively, over the past five fiscal years, the underfunding of the government's obligations to GERS alone has exceeded $200 million, to say nothing of the unfunded obligations for past salaries due to our employees."
However, he said that the proposed supplemental budget bill will cover the government's 2007 fiscal year expenditures to date, including this year's $850.8 million executive budget and the nearly $3 million appropriations bill recently approved by the Senate.
Acting Office of Management and Budget Director Debra Gottlieb added that the government continues to monitor the influx of revenues, which could soon increase as outstanding income, corporate and property tax payments come in.
In the interim, however, there is still a pressing need to cover various debts and to make sure that money already appropriated to various departments, agencies and organizations not get lost, Simmonds said.
The proposed supplemental budget bill:
— increases, by $967,416, the 2007 fiscal year budget appropriation for the Office of the Governor, to pay for prior year expenditures — including funds for the Abandoned Vehicle Task Force and pay increases for security guards on St. Croix;
— requests that the OMB director be given the authority to line item a $20.6 million appropriation included in the 2007 fiscal year budgets to provide for salary increases given to government employees;
— requests that appropriations included in the 2007 fiscal year budget for pending and negotiated union contracts be available until expended;
— appropriates $1.56 million to cover funding shortfalls to the Molasses Subsidy during fiscal years 2005 and 2006;
— reprograms funds intended to repay a FEMA disaster loan to the Office of Management and Budget for other disaster-related assistance;
— appropriates $422,000 as a local match for federal funds received during previous disasters;
— appropriates $3 million to the Department of Education for school-maintenance projects on St. Thomas, St. John and St. Croix (the funds are to be divided equally between both districts);
— appropriates approximately $1.9 million to the Department of Public Works for unpaid vendor obligations;
— appropriates $634,000 to the Department of Health to purchase and store anti-viral Bird Flu vaccines;
— appropriates $275,000 to the Division of Personnel's Health Insurance Special Projects Fund to cover operating costs and expenses for the group insurance program;
— establishes a Public Cemetery Revolving Fund, which will hold all burial fees collected from public cemeteries and be used to pay for burial placards, tomb construction and cemetery operations and maintenance;
— appropriates an additional $250,000 to the third-party fiduciary to cover the 2007 fiscal year costs of the contract;
— appropriates $950,000 to the Department of Finance to begin the 2006 fiscal year single audit;
— appropriates $500,000 to the Department of Finance to fund early retirement benefits for hazardous-duty employees;
— appropriates $600,000 to the Department of Labor to cover outstanding subscription fees for the department's One Stop Operating program;
— allowing a $1.5 million appropriation made to retirees as a one-time cost-of-living bonus to be available until expended;
— appropriates an additional $50,000 to the V.I. Labor Management Committee for the implementation of training programs designed to improve labor-management relations in all government agencies;
— appropriates $126,250 to the Office of Collective Bargaining to secure office space and to hire a financial/economic impact analyst; and
— appropriates $648,872 to the Department of Justice for issues relating to the consent decree and to cover costs related to the court-appointed special master.
Present during Monday's meeting were Sens. Liston Davis, Carlton "Ital" Dowe, Juan Figueroa-Serville, Louis P. Hill, James, Norman Jn Baptiste, Terrence "Positive" Nelson, Usie R. Richards, Ronald E. Russell, James Weber III, Celestino A. White Sr. and Alvin L. Williams.
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