“Insolvency Is Not An Option” is the title of town hall meetings the Government Employees Retirement System will host next week. What then are the options?
Government Retirees United for Fairness, which goes by the acronym GRUFF, has found an idea and asked the GERS board at its last meeting to fund its effort to make it happen.
GRUFF started its attempt to help make GERS solvent in early 2017 but was stalled when the hurricanes hit. In making the presentation to the board, Jeanette Smith-Barry said GRUFF had expended more than $10,000 in its effort and now needed the board to help with upcoming expenses.
“GRUFF is gravely concerned about the immediate and long-term future of our retirement system, which is key to the very survival of retirees throughout this territory,” she said. “We are here because we are aware of the pending insolvency of GERS and strongly believe that there is a way forward that can address the pending insolvency, but that requires support, commitment, collaboration and leadership from GERS.”
The proposal, which is not new, would require the federal government to send taxes it receives when gasoline produced in the Virgin Islands is sold in the United States.
Specifically, it would petition Congress to honor section 28A of the 1954 Revised Organic Act, which states, “The Secretary of the Treasury shall determine the amount of all taxes imposed by and collected during the fiscal year under the internal revenue laws of the United States on articles produced in the Virgin Islands and transported to the United States. The amounts so determined less one percent and less the estimated amount of refunds and credits shall be subject to disposition as follows: There shall be transferred and paid over to the Virgin Islands from the amounts so determined a sum equal to the total amount of the revenue collected by the government of the Virgin Islands during the fiscal year.”
This is the language that has been used to return rum cover over monies to the Virgin Islands and was also applied when the watch factory was operational.
This money, according to GRUFF, would mean billions of dollars returned to the Virgin Islands which could be directed to the retirement system.
Smith-Barry, in her presentation, said the return of excise taxes on gasoline shipped to the mainland was researched and proposed decades ago by the former Presiding Judge of the Territorial Court, Vern Hodge. She said he argued convincingly that a unified effort to pursue this through Congress could yield substantial revenue.
Board members commended GRUFF on its effort.
GERS Administrator Austin Nibbs said for the effort to be successful it would need a collaboration with the V.I. Legislature and the governor.
He said he had talked to the governor recently and the governor was thinking of forming a GERS Working Group. Nibbs added that such a working group would be the place to consider the proposal.
Smith-Barry said GRUFF would need more than $100,000 to continue its effort. She said GRUFF did not want GERS to give GRUFF any money, but issue checks when GRUFF incurred expenses promoting the proposal or in processing petitions for the proposal.
She said Sen. Stedmann Hodge Jr. had provided data that showed that by applying the law, revenue could total over $12 billion just between the years 1990 and 2000.
She said Delegate Stacey Plaskett was already petitioning Congress to allow the USVI to recoup the excise gas tax charged on gasoline produced by the Limetree terminal, but GRUFF suggested to her that the proposal should go further, requesting retroactive collection of excise tax.
The upcoming GERS town hall meetings are scheduled from 5:30 to 8:30 p.m. Tuesday, March 10, at St. Croix Educational Complex and from 5:30 to 8:30 p.m. Thursday, March 12, at Charlotte Amalie High School Auditorium.
The panelists at the town halls will be Nibbs, GERS General Counsel Cathy Smith, Member Services Director Shoran D.C. Sasso and investment analyst Glenville Henderson.