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Monday, March 18, 2024
HomeCommentaryOp-edOp-Ed: Pie-in-the-Sky Giveaways Serve Politicians, Not the People *Updated*

Op-Ed: Pie-in-the-Sky Giveaways Serve Politicians, Not the People *Updated*

As Election Day draws near, Gov. Kenneth Mapp has given out pay raises, promised free college tuition at the University of the Virgin Islands, championed “Christmas bonuses” to retirees about to lose their pensions and made wildly rosy promises about fixing GERS.

But the numbers in his own budgets show these big giveaways are not paid for and his promises are unrealistic.

Take Mapp’s free tuition: Just a week ago, Mapp promised free tuition for up to 1,700 V.I. high school graduates every year- almost exactly half of UVI’s total enrollment. To pay for it, Mapp proposes taking $3 million every year from federal rum taxes remitted to the territory. The rest comes from federal student aid and local funding. But the thing is, just naming a fund doesn’t create new money. The territory still has a giant budget deficit and nothing has happened to permanently increase the territory’s rum funds.

Just enacting a law does not mean it will be paid too. In 2011, the Legislature passed a law “appropriating” $7 million per year of those very same federal rum taxes. Yet with the exception of 2015, the government has simply ignored that appropriation year after year.

Free tuition would be huge for lots of Virgin Islands families. Maybe it’s worth a big sacrifice to achieve. But so long as there are deficits, paying free tuition will mean something else is cut.

Budget Director Julio Rhymer recently estimated the territory’s structural deficit is around $200 million per year. Right now the V.I. government still owes tens of millions of dollars for sewage treatment and trash pickup; tens of millions more in unpaid electric and water bills; tens of millions more in unpaid tax refunds; tens of millions of dollars in prior-year employer pension contributions and millions for workmen’s compensation. If we can afford free tuition, why are these bills unpaid? Will we do without sewage treatment or electricity? Should those owed tax refunds just suck it up? Are we going to stop bothering to try to dispose of trash?

Then there are Christmas “bonuses” for retirees: Mapp recently demanded GERS pay retirees their “annual bonus.” By statute, the V.I. Lottery gives a portion of its revenues to GERS which it is supposed to give out to retirees in small cash payments around Christmas time. They are not a “bonus” in the usual sense, because they have nothing to do with performance or with some surplus to the government’s finances. They are simply cash gifts to voters. That apparently has not happened this year.

“It is critical we resolve this,” Mapp said in a recent statement to media. “Retirees must be paid their bonuses!” he said.

Yet the government still owes GERS about $37 million in prior years’ employer pension contributions. And Juan F. Luis Hospital owes another $11 million. Apparently that “statutory obligation” is not as as important.

Meanwhile, GERS will be broke around 2023 and will have to abruptly cut pensions in half or worse. But hey, is that really more important than a couple of hundred dollars for every retiree right before the election?

Mapp also gave pay raises that increase the minimum government pay but also increasing salaries for teachers, police, social workers, fire fighters and others. Mapp says a newly-restarted Limetree Bay refinery will pay for the raises.

The pay raises have already begun. But the money has not arrived yet. And there is no guarantee there will really be a new refinery. Mapp negotiated a new agreement with Limetree Bay giving them several more years to decide. Company officials have carefully avoided promising anything.

Hopefully it will come to pass. But spending the money now, before there is any guarantee it will happen is like spending money you just know you will win on a horse race tomorrow.

Speaking of horse races; remember the horse racing plans from 2016? Mapp worked out a plan with slot machine company VIGL and Virgin Islanders were told tens of millions of dollars were going to be spent right away in rebuilding the territory’s two horse tracks. The deal even had a built-in timer “guaranteeing” the money would be spent right away. Two years later, that timer has not yet started ticking and there is no clear answer to when it starts. Apparently “right away” is not always right away.

Sometimes politicians’ promises need to be taken with a grain of salt.

These promises sound good. But if they are real, if a refinery is going to come and the territory is also going to see a big jump in economic growth so that all these things can really be afforded, they should wait until the money is actually in the bank.

All these giveaways and promises right before the election do not serve the people. They only serve the politicians giving them.

Editor’s Note: This initially incorrectly described how the free tuition bill worked. It will not cost UVI money.

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