86.8 F
Cruz Bay
Monday, March 27, 2023
HomeNewsArchivesSenate Authorizes Short-Term Borrowing to Fix Budget Shortfall

Senate Authorizes Short-Term Borrowing to Fix Budget Shortfall

After midnight Thursday morning, the V.I. Legislature tabled a $100 million long-term bond bill requested by Gov. John deJongh Jr. to fill the territory’s budget shortfall, replacing it with legislation instead authorizing a very short-term bank loan of $50 million.

DeJongh’s proposal would have used long-term, low-interest debt, secured by rum cover over revenues or gross receipts tax payments, to borrow about $30 million to fill the current year budget deficit. Another $30 million of borrowing would have been for working capital for the Juan F. Luis Hospital on St. Croix and Schneider Regional Medical Center on St. Thomas. Another $10 million would pay past-due hospital electric and water bills. And a final $1.5 million would pay utilities for the Bureau of Corrections.

The legislation would also have authorized $23.8 million to help with closing the territory’s landfills, bringing the proposed new bond debt to more than $98 million.

It would have authorized $70,000,000 for transportation projects on St. Croix’s Melvin Evans Highway and St. Thomas’ Veterans Drive. But this would be funded with Grant Anticipation Revenue Bonds, in advance of future federal funding, and would not affect the annual budget.

The Legislature’s bill, sponsored by seven senators, instead authorizes the government "to reissue a working capital loan in the amount of $50 million prior to the end of (Fiscal Year) 2014." It says the "notes must mature no later than 270 days after issuance," meaning the full loan must be repaid in less than one year. [30-0427]

It authorizes $12 million in new funding for JFL Hospital; $10.5 million to Schneider Regional Medical Center; and $12 million to pay the two hospital’s and the Bureau of Corrections’ past-due utility bills. It also funds several small appropriations, including $125,000 for a new Department of Justice anti-gun violence program.

It makes no mention of the territory’s landfills or work on Melvin Evans Highway or Veterans Drive.

It does mandate the creation of a new task force, with nine members appointed variously by the governor, Legislature and the V.I. Superior Court presiding judge. That new body, which is not funded or manned, is to be tasked with investigations into consolidating government information technology and reducing energy costs "by at least 20 percent" in several government departments, and is to report back to the Legislature.

The bill was special-ordered onto the agenda and passed without debate or discussion after midnight, leaving some unanswered questions, such as how the territory would pay the loan in 270 days and why the Legislature preferred a short-term loan to long-term bond debt.

All but one senator voted in favor of the short term working capital loan legislation. Sen. Tregenza Roach voted no.

Print Friendly, PDF & Email
Keeping our community informed is our top priority.
If you have a news tip to share, please call or text us at 340-228-8784.


Support local + independent journalism in the U.S. Virgin Islands

Unlike many news organizations, we haven't put up a paywall – we want to keep our journalism as accessible as we can. Our independent journalism costs time, money and hard work to keep you informed, but we do it because we believe that it matters. We know that informed communities are empowered ones. If you appreciate our reporting and want to help make our future more secure, please consider donating.