Landowning government employees and retirees may be first to get decades-old retroactive pay if legislation before the Senate is enacted into law.
Tuesday the Senate Finance Committee heard testimony on a bill to allow government employees who are owed retroactive moneys a credit of up to 25 percent of their real property tax bill for the next five years, or until their entire retroactive pay is settled. The committee voted to hold the measure briefly until the Legislature can analyze the impact of the bill on government finances.
At issue is nearly $300 million in promised, but never paid raises, dating back to the 1980s and 1990s. Unions negotiated pay increases, but the money to pay them was not available at the time. (See Related Links below)
They represent salary increases that were negotiated, contracted, but never actually paid because there were never sufficient government revenues to cover them. Acting Finance Commissioner Valdamier Collens said the government owes $96,581,232 to retirees.
Collens testified the bill would worsen the territory’s more than $130 million budget shortfall and would disproportionately benefit only wealthier, landowning government employees and retirees, leaving the most needy in the lurch.
Tax Assessor Ira Mills said the bill would put a long-term damper on property tax revenues at a time when the territory urgently needed more, rather than less revenue. Mills also said the measure would disproportionately help the wealthiest retirees who own the largest amounts of land, while doing nothing for those who do not own land – or do not own enough – to owe large amounts of property tax.
Mills and Collens both said the Mapp administration wants to help the retirees, but would like to see a proposal that helped all the retirees rather than a portion of them.
St. Croix retirees Mary Moorhead and Joyce Rohlsen testified in support of the bill, saying many retirees are struggling to get by and need to get their retroactive pay while they are still alive.
Sen. Kurt Vialet expressed some skepticism about the bill. "Property owners are going to get the relief,” he said. “The little man is not going to get the relief." Vialet also said there is not enough data on the impact of the legislation on the government’s finances.
"It is very, very dangerous to vote on something when you don’t know the impact," Vialet said.
Vialet later moved to hold the bill until the Legislature can get a cost analysis.
Voting to hold the bill were Vialet, Sens. Marvin Blyden, Tregenza Roach and Clifford Graham. Voting no were Sens. Sammuel Sanes and Terrence "Positive" Nelson.