June 5, 2008 — Senate Finance Committee hearings on Gov. John deJongh Jr.'s 2009 budget proposal will begin June 24, Finance Committee Chairman Terrence "Positive" Nelson and Legislative Post-Auditor Francis Laurencin said at a press conference in Nelson's office Thursday morning.
"The budget came down Friday and we haven't had much time to review," Laurencin said. The post auditor's office has begun its overview and finds good news and less good news, he said.
Laurencin recapped some of the governor's budget's highlights. (See "Governor's $867.3 Million Budget Accounts for Slowing Economy.") After paying interest on bonds, income tax refunds and a few other big expenses, the V.I. Government projects net local revenues of $867.3 million. Add in $166.5 million in federal funds and $210.2 million from sources listed as "Other non-Appropriated," "Non Governmental Fund and "Other Appropriated" and the grand total of all projected revenue totals $1.2 billion.
The good news is that revenue collections are up. But so are expenses.
"Individual income taxes increased five percent," Laurencin said. "Corporate income tax went up six percent. Gross receipts increased 5.2 percent. And all other taxes as a group went up 20 percent. That's all good."
The rise in revenues from all non-income taxes is driven by a huge, 75 percent projected increase in real property tax collections, from $59.1 million in 2008 to $103.3 million in 2009.
Personnel expenses have gone up by the largest dollar amount.
"Personnel is up 21.82 percent, from $318.1 million to $387.5 million," Laurencin said. "Fringe benefits are going up 42 percent, from $99.4 million to 141.3 million."
Utilities have gone up by the highest percentage, though not the highest dollar amount, increasing 88 percent from $14.7 million to $27.6 million.
"That of course reflects the sharp increase in the cost of energy," Laurencin said.
The governor's budget proposal shows a 30 percent increase in supplies, going from $121.4 million to $14.9 million.
Nelson and Laurencin cautioned that the figures are only projections, and economic conditions could change actual revenues.
"The economy of the Virgin Islands has had a downturn," Laurencin said. "I would not say a recession yet. But if so, if it continues, it will have an impact on revenues. So we will see how we can minimize costs. "
Nelson said there may be room for some economizing.
"We can control our use of supplies to some degree," Nelson said. "I think we can push to use supplies more carefully and see some savings there."
Budget hearings will begin with a day of overview on June 24, followed by departmental budget hearings.
"Police and the Drug Enforcement Bureau are first," Nelson said. "Public safety is the highest priority. Then we will run almost consecutive days in July and August."
Nelson is inviting all nonprofit organizations and charities to three days of open hearings.
"We hear complaints from organizations that you have to know a senator to get on the agenda and receive local funding," Nelson said. "So I wanted to have public hearings where any deserving organizations that may have gone under the radar can come in and make their case."
Those hearings are at 6 p.m. July 30 on St. Croix, July 31 on St. Thomas and August 1 on St. John.
Nelson also wants to see the V.I. Government pay the V.I. Water and Power Authority all its overdue utility bills.
"If the government pays its $18.5 million in debt to WAPA, they say they can do urgently needed maintenance work," he said.
Unexpended revenues from prior years need to be reconciled and folded into the current budget, Nelson said. "In March of 2008 there was $72 million in government coffers that remains unexpended from prior years," he said, adding that he thinks the grand total of leftover funds is higher still. These are not just funds appropriated for ongoing projects that still need completing, Nelson said, but also the sum of many small amounts of money left over from many finished or aborted projects, unspent and nearly forgotten.
Not all government ills can be fixed with money alone, Nelson said, when asked what could be done in the budget to help problems at St. Croix's Golden Grove Correctional Facility.
"The problem at Golden Grove is not appropriating money," Nelson said. "We have appropriated money for the prison. Golden Grove's problem is twofold. First there is the issue of releasing money. Second, the Bureau of Corrections is within the Department of Justice. They have no separate budget and it is difficult to make sure the money gets to them. That is part of why the BOC is being separated from Justice; so they will have a separate budget."
The Election System and the Public Services Commission wind up departmental budget hearings on Aug. 8. The Finance Committee will then be done hearing testimony. There are two more hearings Aug. 25 and 26 to recap and update the budget bills. The full Senate will then debate and vote on the budget.
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