LAWMAKERS CONSIDER BUDGET REQUESTS FROM DEPARTMENT OF TOURISM, DEPARTMENT OF FINANCE, PUBLIC FINANCE AUTHORITY AND OFFICE OF DISASTER RECOVERY

Published: Jun 13, 2023

ST. THOMAS – The 35th Legislature of the Virgin Islands’ Committee on Budget, Appropriations, and Finance, led by Senator Donna A. Frett Gregory continued Fiscal Year 2024 budget hearings in the Earle B. Ottley Legislative Hall. Lawmakers heard testimony concerning the budgets of the Department of Tourism, Department of Finance, Public Finance Authority, and the Office of Disaster Recovery.

In block one, Joseph Boschulte, the Commissioner of the Department of Tourism delivered testimony. The recommended budget for the Department of Tourism for Fiscal Year 2024 totals 34,276,029, which is an increase of 13% from the Fiscal Year 2023 budget of $30,097,941. This includes $2,493,094 in personnel services, $1,192,641 in fringe benefits, $471,325 in supplies, $29,937,970 in other services, and $181,000 in utility services. There are twenty-two filled positions. There are seven vacant and eleven new positions.

According to Boschulte’s testimony, tourism has been growing exponentially in the territory. During Winter 2022/2023, visitor arrivals from the U.S. increased by 15%, totaling nearly 295,000 airline passengers. The hotel occupancy rate of 75.2% has exceeded the region’s occupancy rate by 2%. Hotel room occupancy tax collection in Fiscal Year 2022 was $45.6 million, the highest hotel tax revenue ever collected. $1.6 Million passengers arrived at WICO and Crown Bay Docks in St. Thomas. It is forecasted that both ports will gain an additional 200,000 passengers in 2023. St. Croix Frederiksted Pier received more than 83,000 passengers in 2022 and is expected to gain 67,000 passengers in 2023. Boschulte reminded the body that over 60% of the USVI GDP comes from tourism. He said there is a very competitive environment in the Caribbean and the Virgin Islands continues to shine.

Chair Donna A Frett-Gregory voiced concern over employee pay at the Department. According to Assistant Commissioner Alani Henneman, salary increases had not been granted since 2017. Henneman also stated that salary increases would be applied retroactively from 2020. Commissioner Boschulte voiced his eagerness to work with the Office of Management and Budget to allow for salary increases. Senator Frett-Gregory also voiced concern over inaccurate fund balances and urged the Department of Finance and the Office of Management and Budget to reconcile the balances, stating that the budget would not be moved until they were corrected. Senator Frett-Gregory also implored the Department of Tourism to deliver an updated listing of personnel, stating that it was unclear in the testimony.

In block two, Clarina Modeste-Elliott, the Acting Commissioner of the Department of Finance delivered testimony. The Department of Finance is comprised of forty-six full-time positions. The total proposed budget for the Department totaled $14,719,612 from the General Fund. This would fund sixty-seven full-time positions, inclusive of vacancies and new positions. This includes other services of $9,184,763, personnel services of $3,231,263, Fringe Benefits of $1,443,587, Capital Projects of $200,000, and utilities of $380,000. Of the filled positions, there are thirty-two positions on St. Thomas and fourteen on St. Croix. Of these positions, twenty-seven positions are classified and nineteen are unclassified. There are fifteen vacancies and six new positions. The vacant positions are expected to be filled by the first quarter of FY 2024.

Chair Donna A. Frett-Gregory once again voiced concern over inaccurate fund balances for the Department and urged their correction and stated that the budget would not be approved if they were not revised. She urged the body to properly vet the budget that was before them, once again reminding the body that the Government would have been in financial despair had it not received federal funds following the passage of the 2017 Hurricanes.

In block three, Nathan Simmonds, the Director of Finance and Administration at the Virgin Islands Public Finance Authority delivered testimony. A general fund appropriation from the miscellaneous section of the Budget for Fiscal Year 2024 of $5 Million for the Public Finance Authority and $2 Million for the Office of Disaster Recovery was submitted. There are twenty positions at the Public Finance Authority, seven are currently vacant. All positions are exempt. PFA’s FY 2024 budget is inclusive of $2,278,500 for staff salaries and fringe benefits. Adrienne Williams-Octalien, the Director of the Virgin Islands Office of Disaster Recovery delivered additional testimony. Director Williams-Octalien mentioned that there is a planned integration of the Community Development Block Grant – Disaster Recovery (CDBG-DR) program that is currently administered by the Virgin Islands Housing Finance Authority. This merger is expected to add forty-five positions to the FY2024 budget. ODR would absorb salaries and fringe benefits of the existing CDBG-DR staff and provide management of program staff with direct oversight of projects. Currently, there are twenty-three staffed positions. There are two vacancies at the Office of Disaster Recovery. All positions are exempt.

Senators present at today’s committee hearing included Donna A. Frett-Gregory, Novelle E. Francis, Jr., Angel L. Bolques, Jr., Samuel Carriόn, Dwayne M. Degraff, Kenneth L. Gittens, Franklin D. Johnson, and Carla J. Joseph.

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