How much rum tax is returned to the Virgin Islands is essential to the over 8,700 retirees receiving checks from the Government Employees’ Retirement System. However, Angel Dawson, the GERS administrator, told the board of trustees that it amounts to little more than a “statistical rounding error” to the U.S. Congress, and he noted that Congress is presently having trouble passing any tax legislation.
Board member and former Sen. Ronald Russell initiated the discussion by questioning whether the board should travel to Washington, D.C., to lobby for a rum tax return of $13.50 per proof gallon. The territory is only receiving $10.50 presently for every proof gallon. The federal Bipartisan Budget Act of 2018 set the per-gallon rate to $13.25 for five years following the back-to-back Category 5 hurricanes of September 2017, but that expired at the end of December 2021.
The GERS rescue plan lawmakers enacted in 2022 was based on getting the $13.25 per gallon.
Dawson reported that the Virgin Islands’ failure to get higher returns was not due to a lack of effort. He said Gov. Albert Bryan Jr., Delegate Stacey Plaskett, and the territory’s lobbying firm in Washington were all pushing for it.
Board Chair Dwane Callwood said he was against the idea of the whole board going to Washington, D.C.
Russell tried to unseat Callwood as board chair later in the meeting. Russell said it was time for someone from St. Croix to chair the board. However, when the votes were tallied, Callwood received four votes, and Russell received two. Trustee Leona Smith was elected vice chair.
Tahmin Clarke, who replaced Nellon Bowry and retired as a trustee at the end of 2024, attended his first meeting. Clarke had questions about how investment strategy has changed considering the changing administration in D.C. He was told the board was taking 10 percent of its equity vestments and placing them in bonds. The move should “reduce the volatility” of GERS’ investments. Last month, the trustees also moved some of GERS’ funds from big stock companies like Facebook, Microsoft, and Apple to smaller companies. In the treasurer’s report, Denise Jeremiah said in December 40 percent of the $26 million needed for disbursements was collected.
Dawson reported that the hotel being constructed on St. Thomas waterfront property owned by GERS was 70 percent completed and should be finished by May.
Board member Andre Dorsey questioned whether SkyCity VI Airport employees would be members of GERS. SkyCity is taking over the operation of the Cyril E. King Airport on St. Thomas and the Henry E. Rohlsen Airport on St. Croix. Callwood said GERS did not have any authority over a private company.
