ST. THOMAS- The Committee on Finance, chaired by Sen. Kurt Vialet, convened at the Earle B. Ottley Legislative Hall on Tuesday to receive testimony from Governor Mapp’s Financial Team regarding the Overview of the Fiscal Year 2019 Proposed Executive Budget.
The Director of the Office of Management & Budget, Julio A. Rhymer, noted that with the assistance of the Federal Government and billions of dollars approved for the territory, the budget amount; $1.278 billion, reflects a sustainable balanced budget that includes a five-year forecast to provide fiscal guidance. It is funded by $851.34 million in local funds and $238.66 million in federal funds. The budget outlay includes $150 million in debt service payments and $38 million in income tax refunds.
Chairman Vialet commended the Financial Team on their efforts to address parts of their unfunded liability under GERS and that the infusion of money included in the proposed budget is $10 million more than usually received. He also stated the $131.69 million projected in new revenues were well justified in the documents submitted although, “There will be challenges trying to pass a budget without all collective bargaining agreements in place. If we cannot achieve a final cost before September, supplemental appropriations can be made for the Fiscal Year 2019 budget.”
“The increase in funding presented must include a combination of austerity measures and creativity applied when considering the reassignment of our workforce. Entities such as the Bureau of Economic research should be placed under the Office of Management and Budget,” said the Chairman.
Chief Negotiator Tang-How stated though contract negotiations are ongoing, their bottom-line figure of $14 million is developed, adjusted and reviewed in collaboration with OMB to ensure accuracy. Members present agreed that further clarification and reports on those figures will be requested through the Chair.
The Governor proposed to address outstanding employer contributions to GERS with an additional 3% in its employer contributions; 20.5 to 23.5%, over the next three years and increase the benefits of retirement to $75,000. Through the Virgin Islands Housing Finance Authority, the GVI also plans to acquire 290 acres (170 on St. Croix; 120 on St. Thomas) of non-performing assets from the retirement system to continue the $7 million annual contributions from the Matching Funds Revenues.
The Fiscal Year 2019 general fund expenditure budget request allocated $639 million to the executive branch departments and agencies. Majority Leader Neville James questioned the decision to reduce some allocations while boldly increasing others. He expressed his concern on the focus in creating this budget calling the reduction of $1 million in the Legislative and Judicial branches unfortunate. Sen. Janelle Sarauw asked if there were any plans considered to restore the 8% pay cut. Commission Collens replied, “My understanding as the law is written, we can begin to accumulate those funds; roughly $65 to $68 million owed, in 2021 by utilizing the Environmental Impact Fee.”
The members of the Governor’s Financial team present during today’s testimony: Valdamier Collens, Commissioner of the Dept. of Finance; Marvin Pickering, Director of the Bureau of Internal Revenue; Ira Mills, Tax Assessor; Office of the Lt. Governor; Attorney Natalie Tang-How, Chief Negotiator of the Office of Collective Bargaining; and Milton Potter, Director of the Division of Personnel.
Committee members present during today’s hearing: Senators Kurt Vialet, Marvin Blyden, Neville James, Nereida Rivera-O’Reilly, Brian Smith, Tregenza Roach and Dwayne DeGraff. Non-committee members present include Senators Jean Forde, Novelle Francis, Alicia “Chucky” Hansen, Myron D. Jackson, Janette Millin-Young, Positive Nelson and Janelle Sarauw.
“As we continue this process, I encourage my colleagues and representatives from all agencies to consider measures that will make our government more efficient,” concluded Chairman Vialet.
The Committee on Finance will convene today at 9:30 a.m. in the Earle B. Ottley Legislative Hall on St. Thomas to receive testimony on: The status of programs administered in the territory post hurricanes, the recovery phase and BR17-0719; Lease Agreement between the GVI, acting through the Commissioner of the Department of Property and Procurement(“Lessor”) and Industrious Auto Repair, Inc. (“Lessee”).