ST. THOMAS, VI - The Committee on Budget, Appropriations, and Finance, led by Senator Novelle E. Francis, Jr. met in the Earle B. Ottley Legislative Hall to receive testimony from the governor’s financial team regarding the update of the Fiscal Year 2027 budget. Committee members also considered two measures relating to a lease agreement and appropriation of funds. Approved bills will be forwarded to the Committee on Rules and Judiciary for further vetting. 

Mr. Julio Rhymer, Sr., Director of the Office of Management and Budget, presented the Fiscal Year 2027 Budget wrap-up testimony on behalf of the governor’s financial team. The proposed Executive Budget totals $1.64 billion, combining $958 million in General Fund revenues, $543.3 million in federal funding, $93.4 million in other appropriated funds, and $43.6 million in non-appropriated funds. Revenue projections assume $428 million from individual income taxes, $72.5 million from corporate income taxes, $245 million from gross receipts taxes, $56.2 million from real property taxes, and $43 million from excise taxes. Priority spending focuses on infrastructure, housing, public safety, education, healthcare, and disaster recovery. Disaster recovery serves as a major driver, with the Office of Disaster Recovery expecting to spend $733.9 million in FY 2027. 

The testimony covered financial pressure, projecting that FY 2026 will close with a $58.997 million deficit. Unrestricted cash flow remains tight; as of August 7, 2026, the ending operating cash balance was $34.5 million, representing 8.7 days of cash on hand. Total cash collections for FY 2026 are estimated at $996.9 million, which is $104 million lower than initial estimates. Operating expenditures paid through August reached $1.1 billion, spanning $429.2 million for payroll, $203.8 million for health insurance, $111.6 million for semi-autonomous allotments, $38.5 million for tax refunds, $5.5 million for local Medicaid matches, and $300.4 million for other vendor payments. To manage immediate cash flow needs, the government utilizes a $150 million line of credit facility. As of August 13, 2026, the government owed $124.78 million on this line, leaving $25.22 million available to borrow. The emergency savings account, known as the Budget Stabilization Fund, had $14.6 million in early August, but $3 million was recently utilized. To help cover the current deficit, the Governor is asking lawmakers to let the government use money won from the Epstein and Leon Black legal settlements; the Epstein fund currently holds about $74-79 million. 

The team then raised policy concerns regarding open-ended legislative spending. Currently, $157.5 million in General Fund and Special Fund appropriations from FY 2021 through FY 2026 were designated as "available until expended," with $73.2 million remaining unexpended overall and $21.3 million unexpended specifically from the General Fund. The administration urged the Legislature to limit open-ended appropriations, force unspent money to return to the budget after a set deadline and review all old unspent money before approving new bills.  

Regarding human capital, the government employs 9,858 total workers, with 5,631 serving in the central government workforce. The territory's overall workforce is expected to expand to 41,350 by 2027; however, inflation reached 7.6% in 2025, andunemployment adjusted upward to 4.5% as of June 2026. Group health insurance covers over 19,370 employees, retirees, and dependents, with total premium costs projected to rise from $223.5 million to $236.4 million in FY 2027.  

Bill No. 36-0334, an act appropriating $20,000 from the Budget Stabilization Fund to the Virgin Islands Department of Health for the repair and replacement of the air conditioning system serving the Maternal Child Health Unit and the Division of Children with Special Needs on St. Thomas was removed from the agenda. Senator Avery L. Lewis, the sponsor of the measure, stated that the Department of Health and the Office of Management and Budget were able to come to an agreement that will result in the DOH being allocated the funds they need.  

Lawmakers then considered Bill No. 36-0308, an act appropriating the sum of $150,000 from the Virgin Islands Education Initiative Fund to the Virgin Islands Department of Education to conduct a biennial fixed asset inventory.   Assistant Commissioner of the VI Department of Education, Victor Sommes testified in support of the measure and asked that the funding be renewed every two years to maintain federal compliance which requires a physical inventory for all grant-funded assets valued at $5,000 or more. The upcoming count covers roughly 486 capital assets spread across 65 locations on all three islands. Local General Funds previously covered this cost, but deadline constraints and rules prohibiting federal funds from covering non-grant assets made that unfeasible this year. Due to limited internal staffing, VIDE hired contractor Bondurant Enterprises, Inc. to run the inventory. The $150,000 covers contractor fees, technical system reconciliation into VIDE's software, and travel logistics across all 65 sites.  

Senator heard testimony regarding Bill No. 36-0339, an act approving the lease agreement between the Government of the Virgin Islands, acting through the Commissioner of the Department of Property and Procurement, and Eight One Subbase, LLC for Parcel Nos. 81A and 81B, Submarine Base, No. 6 Southside Quarter, St. Thomas to develop a food court. Department of Property and Procurement Assistant Commissioner Vincent Richards presented testimony supporting the measure. Eight One Subbase plans to invest $500,000 of its own money to develop a mobile vendor food court. The facility will feature multiple food vans, a bar, restrooms, parking, shaded seating, storage, and security systems. The lease agreement runs for 20 years with three 10-year renewal options. Standard rent is set at $12,000 annually. Because the land is in a CZM Tier 1 zone and requires extensive utility installation, brush clearing, and permitting, the tenant receives reduced rent during a 36-month construction phase: $100 per month for months 1 through 18, and $500 per month for months 19 through 36. 

Mr. Kwesi R. Howard, on behalf of Eight One Subbase, LLC provided additional advocation for Bill No. 36-0339. The developer plans to use the site to build the "Reggae Food Yard”. He is using private capital to fund all site clearing, utility installations, security, and facility improvements. This setup specifically lowers the high upfront costs that often prevent local food entrepreneurs from opening traditional restaurants. Beyond creating a safe gathering space, the development aims to stimulate the local economy. 

After discussion, senators voted favorably on Bill No. 36-0308 and Bill No. 36-0339. 

Senators present at today’s committee hearing were Novelle E. Francis Jr., Marvin A. Blyden, Angel L. Bolques Jr., Dwayne M. DeGraff, Ray Fonseca, Kenneth L. Gittens, Hubert L. Frederick, Marise C. James, Carla J. Joseph, Avery L. Lewis, Milton E. Potter, and Kurt A. Vialet. 

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