St. Thomas – The Committee on Finance chaired by Sen. Kurt Vialet, held a meeting at the Capitol Building on Tuesday, to receive testimony on an overview of the Fiscal Year 2018 Budget from the Department of Finance.
The FY 2018 recommendation for the General Fund Budget is $4,878,000. This is a 10% reduction of $564,750 in comparison to the FY 2017 Budget of $5,442,750. The proposed budget also includes $778,095 for the Government Insurance Fund, $217,749 for the Indirect Cost Fund and $5,873,844 for combined Appropriated Funds.
“Is the 10% reduction in the General Fund Budget attributable to the reduction of personnel services?” asked Sen. Tregenza Roach. Commissioner Collens said, “Yes, the department has removed positions in personnel that are not needed with respect to the Board of Tax Review.”
Sen. Vialet inquired about the increase of the Government Insurance Fund. Commissioner Collens said, “I don’t know why there is an increase but when we looked deeper, the department found that some employees have a family plan with more dependents. The fringe benefits increased because of that.”
The Department of Finance budget breakdown is as follows: $3,079,720 for personnel services, $1,143,551 for fringe benefits, $1,051,080 for other services and charges, $94,000 for capital outlays, $360,000 for utilities and, $$217,329 for supplies.
“In comparison to FY 2017, why is there a 66% variance for supplies for FY 2018?” asked Sen. Marvin Blyden. Commissioner Collens said, “In meeting the mandate, we recognized that it's better to take stock of inventory rather than purchasing new supplies.”
Lawmakers also requested further information about the utility costs.
“In FY 2017, the utility cost was $667,000,” said Sen. Vialet. “However, for FY 2018 it is $360,000. This is a substantial decrease.” Commissioner Collens said, “We attributed the reduction to conservation efforts, which have decreased consumption and expenditures.”
Sen. Roach asked, “What are the expenditures to date for utilities?” Commissioner Collens stated that the department has expended $327,000 as of July 30th.
Separately, Margaret Guarino, Director of Finance and Administration for V.I. Public Finance Authority (PFA) stated that the FY 2018 budget has not been approved by the PFA Board. However, she said that the proposed FY 2018 budget will be used for operations, payroll and administrative expenses.
“Is there a significant difference in the governor’s recommended budget of $1.7 million for FY 2017 in comparison to FY 2018?” asked Sen. Brian Smith. In response, Director Guarino stated that it is currently the same. Then Sen. Smith asked, “What is the debt ceiling for the government of the Virgin Islands?” Director Guarino stated that it is $1 billion. “How close are we to reaching it?” asked Sen. Smith. Director Guarino stated that we are $737 million away.
Senators also inquired about rum production and resolving the decline of the bond ratings. Sen. Vialet asked, “Is the rum production in FY 2017 the same for FY 2018?” Denise Rhymer, Legal Counsel for PFA said, “In comparison to FY 2016, there is a slight increase in terms of the rum cover over sold in U.S. during the first quarter of FY 2017.”
Sen. DeGraff inquired about the continual decrease in bond ratings and what is PFA doing to fix the situation. Valdamier Collens, Executive Director of PFA said, “PFA is working to fix this comprehensive task to increase bond ratings. One of the ways is to improve the internal metrics.”
In addition to the Department of Finance and PFA, the Virgin Islands Public Service Commission (PSC) and the Office of Management and Budget (OMB) also shared their FY 2018 budget requests.
Donald Cole, the Executive Director of PSC stated that the FY 2018 budget is $2,782,807. He also stated that the FY 2018 expenditures are $1,792,173.37. Personnel services and fringe benefits total $1,309,652.87, capital outlays is $9,200 and $473,320.50 covers electricity, water, office supplies, repairs and maintenance, automotive repairs, rent land/building, professional services, security, communication, advertising, transportation, insurance, travel and other services.
Nellon Bowry, Director of OMB stated that the appropriation request is $4.44 million this includes $2.45 million from the General Fund and $1.99 million from the Indirect Cost Fund.
Committee Members present are senators Kurt Vialet, Marvin Blyden, Neville James, Brian Smith, Tregenza Roach and Dwayne DeGraff. The next Committee on Finance meeting will be held on Wednesday, August 23rd at the Fritz E. Lawaetz Conference Room on St. Croix.