ST. Thomas- Members of the Committee on Finance chaired by Sen. Kurt Vialet, held a meeting at the Capitol Building on Tuesday, to receive testimony from the Governor’s Financial Team on the economic condition of the Government of the Virgin Islands (GVI) and an outlook for the amended FY 2019 Budget.
The FY 2019 amended to $1.317 billion funded by $1.078 billion in local, transfer, other revenue sources, and $238.66 million from Federal Grants. The amended budget proposals projects $38.5 million revenues from Limetree Bay Terminals totaling $170 million in new revenues because of rebuilding and restarting the refinery operations and growth in construction, housing, and infrastructure sectors; according to Julio Rhymer, Director of the Office of Management and Budget.
“Is this a balanced budget and will there be a deficit for FY 2019?” asked Sen. Neville James. Director Rhymer stated that the budget is balanced and there are no deficits for the upcoming fiscal year. The Territory received $215 million out of the $296 million in Community Disaster Loans in FY 2018. The Arc Light Capital LLC. is investing $1.4 billion into rebuilding the refinery on St. Croix. Additional revenues are from withholding excise and gross receipt tax.
Included in the supplemental budget, is Governor Kenneth Mapp’s Executive Order that states that all annual salaries of Executive Branch employees will increase to $13/hr. or $27,040 annum. “There is $1.26 million needed per pay period out of the $11.1 million. Therefore, a lump sum of $11.1 million is not required,” said Sen. Vialet. Director Rhymer stated that the lump sum is preferred but not necessary.
“How much cash is at hand for GVI?” asked Sen. Novelle Francis. The Commissioner of the Department of Finance Valdamier Collens stated that presently there is $25 million. Sen. Francis inquired, “The 38.5 million from the Lime Tree revenues is separate from the $70 million from that deal, did GVI receive those funds?” Commissioner Collens stated that the $70 million was not received because the appropriation has not occurred. “The $70 million are monies the Governor wants to spend in FY 2018, not FY 2019,” said Sen. Neville James. Collectively, the Governor’s Financial Team agreed.
Post Hurricanes Irma and Maria there is a steady decline in the Tourism Industry due to the destruction of the hotels. In FY 2017 there were 637,782 air arrivals in comparison to the decrease in FY 2018 in which there are 271,251 air arrivals or a loss of 57.5%. Similarly, in FY 2018, the Cruise Industry had dropped by 31.2% with only 920,960 cruise passengers compared to 1,976,569 in FY 2017. “What is the dollar value for the reduction of tourism?” inquired Sen. Novelle Francis. Julio Rhymer, Director of OMB, stated that there is an economic loss of approximately $10 million.
The Construction jobs have increased to 24.7% for FY 2018. Currently, there are 2,050 construction jobs in comparison to the 1,647 in FY 2017. Donnie Dorsett, the Senior Policy Analyst of the Bureau of Economic Research, stated that this is “healthy growth for that industry. “Construction jobs are temporary whereas employment in the Tourism Industry has proven to last a lot longer,” said Sen. Janette Millin Young.
“Considering that Main Street is under construction, what is the economic impact on the economy?” inquired Sen. Jean Forde. Delbert Hewitt, Office of the Lieutenant Governor, said, “The biggest financial decline on Main Street is the retail stores. The value of lost business is unknown.” ###