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Questions Swirl In Apparent Tourism Budget Spat

An apparent dustup over the Tourism Department’s budget has even government insiders “baffled.” (Photo by Mat Probasco)

An inter-departmental kerfuffle about the Tourism Department’s budget became a public pistarkle Wednesday, with even government insiders scratching their heads.

Reports surfaced earlier in the week that Tourism was laying off greeters at the territory’s ports and making other cuts because allotted budget funds were not available. If indeed the funds were not available, why they were not available, how much was not available, how many people were out of work — if any at all — were all questions unanswered as of Wednesday evening.

Requests for comment from Government House, the Office of Management and Budget, and the Finance Department were not replied to. Tourism Commissioner Joseph Boschulte broke two agreements for phone conversations while he was in and out of meetings on Grand Cayman Wednesday afternoon. Then, around 6:30 p.m., said he had “no comment at this time.”

The chair of the Senate’s Budget, Appropriations, and Finance Committee said she’d had conversations with OMB, Finance, and Tourism but still didn’t understand why the tangle had risen to the level of public display.

“I’ve never seen anything like this,” Sen. Donna Frett-Gregory said of the alleged spat between the departments. “I’m certain there are disagreements from time to time but it doesn’t escalate to the point where it gets in the media. This is executive-to-executive branch. This is not different branches of government that’s having this discourse. This is one branch of government that’s headed by the governor. So at some point we have to find out what he has to say.”

Part of Tourism’s roughly $32 million budget was reportedly made available Tuesday — more than two months after the beginning of the 2024 fiscal year. The delay remained unexplained.

“The tourism industry is the bread and butter of the U.S. Virgin Islands. The last thing we want to do is have this back and forth with powers that be within the OMB and the Department of Finance and the Tourism Department. This is not about us individually. This is about us collectively. So we have to figure this out,” Frett-Gregory said.

Funding for the Tourism Department is a little different than other departments, Frett-Gregory explained, with a portion coming from hotel tax revenues. This revolving fund, called the Tourism Advertising Revolving Fund, had plenty of money in it, she said.

“I just don’t think it’s a good look for us to be having these types of discussions when we passed the budget and the chief executive — which is their boss, the governor of the Virgin Islands — signed off on the budget bills for FY2024. Those budgets should have been logged on the system for more reasons than one. That fund, based upon the information they provided to us when they came before the Legislature hearing, has more than enough money,” she said.

Frett-Gregory guessed, with new hotels coming online, the Tourism budget funded by hotel tax collections could have as much as $40 million in 2024 for the 2025 budget.

“Depending on our tourism industry and how successful we are this season,” she said, adding that the delay was “baffling” given the strong previous tourism seasons.

Frett-Gregory said she and her Senate colleagues received regular phone calls from vendors seeking payment for services to the Virgin Islands government, including Tourism. These included calls from greeters and musicians at airports, local promoters and on the mainland, and all sorts of events sponsored by Tourism.

“I’m not certain why they’re having that internal back and forth. But the concerning part for me is this apparently has been going on prior to FY2024. There are a number of vendors that have been calling my office and some of my other colleagues who say they have not been paid from last fiscal year,” she said. “And we’re into the holiday season. These are folks who provided their services. These are people we lean on in our community to provide us services. And they have to feed their families. It’s the holidays.”

Tourism runs the Division of Festivals. With Crucian Christmas Festival coming up, Frett-Gregory was especially concerned that vendors be paid.

“So, again, that also provides a setback for our Department of Tourism to get the vendors paid. We can’t continue to ask our vendors to provide services if we aren’t paying them in a timely fashion. This is a small community and our economy depends on those payments. Once the money comes into those vendors, they push it out to the economy. This is a win-win for all of us,” she said.

With the Tourism budget dustup being both widely discussed and a matter of how public money was spent, Frett-Gregory said she’d look into a special legislative inquiry.

“My fix for this is, listen, put the budget on the system, you guys go in the back room, figure out your issues, and come back to the people and have this matter resolved. This should not have gotten to this level. This is very unfortunate that we are seeing something as frivolous and petty as this occurring here in the Virgin Islands at this time,” she said. “There must be some legislative inquiry at this point. It has created a lot of conversation, a lot of discussion, and all these funds belong to the people of the Virgin Islands. My responsibility as the chair of the Budget, Appropriations, and Finance Committee is to get to the bottom of it.”

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