ST. THOMAS – Members of the Committee on Finance chaired by Sen. Kurt A. Vialet convened in a meeting at the Capitol Building on Tuesday to receive testimony from the Governor’s Financial Team on the proposed Fiscal Year 2021 Executive Budget for the Government of the Virgin Islands of the United States. The Governor’s Financial Team comprises of the Bureau of Internal Revenue, the Office of Management and Budget, the Division of Personnel, the Office of Collective Bargaining, the Office of the Lieutenant Governor, the Department of Finance, and the Public Finance Authority.
The FY 2021 proposed budget totals $1,224,532,219. This is inclusive of capital projects, operating resources, and the financial status of the Virgin Islands to include priorities and major initiatives. The FY 2021 budget also reflects the removal of vacancies for all government departments and agencies and the elimination of unmandated costs; according to Jenifer O’Neal, Director of the Office of Management and Budget. Furthermore, O’Neal mentioned that the budget includes the collection of excise tax revenues and the award of $63 Million to the Government Employees Retirement System in which both are awaiting a verdict in the appellate court.
The FY 2021 budget breakdown is as follows: $742,779,823 for the General Fund, $33,104,434 for Other Appropriated Funds and $290,906,550 for non-disaster related Federal Funds. Upon adoption, the appropriated $783,275,537 portion of the budget sets the legal appropriation for FY 2021. In response to Senate President Novelle Francis’s inquiry regarding the amount of non-disaster federal grants received, O’Neal mentioned that $288 million in non-disaster Federal Grants was awarded in FY 2020 and $290.9 million is anticipated to supplement the budget for FY 2021. Sen. Vialet queried the reason for the significant difference for the collection of gross receipt taxes between the St. Thomas-St. John District and the St. Croix District. Bureau of Internal Revenue Director Joel Lee indicated that although there are more businesses in the St. Thomas-St. John District, there are a handful of non-residential commercial construction and development on St. Croix that pays a lot more in gross receipt taxes. “The projections are very conservative. As of May 2020, approximately $172 million in Gross Receipts Tax were collected despite the Territory shutting down to curb the spread of the coronavirus,” said Sen. Vialet.
Separately, in response to Sen. Oakland Benta’s inquiry whether the FY 2021 budget represents a surplus or a deficit; O’Neal mentioned that due to the COVID-19 pandemic that adversely impacted businesses and the Tourism Industry, there is a deficit. Furthermore, there is a significant decline in the collection of several revenue sources that are projected based on the FY 2020 Adopted Budget. O’Neal indicated that declines are ranging from 3.72% to 30.3% for revenue collections for the Individual Income Tax, Corporate Income Tax, Real Property Tax, Gross Receipts Tax, and Licenses, Fees, and Permits. Despite reduced revenue projections, O’Neal mentioned that some of the highlights are that $5 Million is appropriated for the Stabilization Fund and there is $7.2 Million in Funding for Mental Health Services in the Department of Health. Lastly, the Territory received $270 million from the CARES Act for COVID-19 matters. The funds cannot be used to offset the FY 2021 budget shortfall. ###