At the annual meeting of the St. Croix Chamber of Commerce on Tuesday, directors were sworn in and members shared suggestions on improving the economic situation of the territory – especially in light of the Monday night State of the Territory address by Gov. Kenneth Mapp that included tax increases opposed by businesses throughout the territory.
Although the sitting governor usually addresses the annual chamber meeting, Kimberly McCollum, board president, said Mapp would speak later in the month. Instead, McCollum updated the group on recent meetings with legislators and the governor regarding implementing a so-called sin tax to alleviate dire financial problems and provided feedback on recommendations made by the membership that had been presented to government officials.
The territory’s chambers of commerce are not in favor of the additional tax on alcohol, cigarettes and sugar-sweetened drinks or taxes on time shares, and they offered an eight-page list of reasons why, as well as alternative ways to raise revenue for the Virgin Islands. The document was authored by the chambers, the St. Croix Hotel Assoc., the St. Croix Retail and Restaurant Assoc. and the American Resort Development Assoc.
According to McCollum, the suggestions were shared and received favorably by the governor and his financial team.
“It is a pivotal moment in the Virgin Islands because everybody in the community is coming together – the Legislature, the governor, the community,” she told the members. “It takes input from every single one of us.”
The main reason the groups oppose the tax is that residents would bear the brunt rather than visitors to the territory. The taxes will render the items more expensive, increasing the cost of doing business in the territory, they said. Additionally, the sin tax will be perceived by potential investors as insufficient to pay obligations and will encourage illegal trafficking in the taxed items.
Revenue enhancing measures, offered by the business groups, included changes in the operations of the Division of Corporations and Trademarks in the Office of the Lieutenant Governor, the Bureau of Internal Revenue and the V.I. Economic Development Authority to streamline procedures and attract more new businesses to the territory.
New revenue could be achieved, also, according to the chamber’s suggestions, by legalizing and taxing marijuana, taxes from AirBnb and VRBO rentals, and gross receipts taxes paid by casinos and racinos. Road taxes paid by taxis should help as well as tax increases in other areas.
The business associations believe the government should adopt austerity measures to insure the multi-year plan can work. They recommended assessing and reducing staff levels by 10 percent. They also recommend implementing legislation from two years ago to reform the Government Employees Retirement System and to strive to achieve parity funding from the federal government.
The objective is to determine how much government the community can afford and put it in place.
“Private sector is wary of putting new revenue potentials on the table and allowing the GVI (Government of the Virgin Islands) to consume these as it fears they will never sunset and the spending will not go towards addressing financial sustainability,” the document says.
Chamber members offered other cost saving measures of their own during the meeting. Several said that liquor licenses cost less than in the U.S. and could be raised.
One new member requested a one-step process for renewing annual business licenses. That suggestion was applauded.
Another member advised reviewing all licensing fees – some could be increased and others decreased with support from the community.
At the beginning of the meeting, new board members were sworn in by Fred Handleman, executive director, and McCollum listed the chamber’s accomplishments, which included events, scholarships awarded and a partnership with the Small Business Development Center to craft policies for the organization.
Guest speakers were Wayne Huddleston, senior area manager for the Small Business Administration, who introduced a new business mentoring program, SCORE, and the Emerging Leaders program that will be implemented in the territory if there is enough interest.
Last year’s businessman of the year, software developer Leon Hughes of Nearix, spoke about his experiences with the Emerging Leaders program and recommended it to “enhance the community.”