ST. THOMAS – Members of the Committee on Budget, Appropriations, and Finance, chaired by Donna A. Frett-Gregory, convened in a meeting at the Capitol Building. The Governor’s Financial Team provided a financial overview of the Government of the Virgin Islands. Senator Frett-Gregory noted that the initial date for the hearing was February 10th. However, due to scheduling conflicts with the members of the Executive Branch’s Financial Team, the meeting was rescheduled for February 21st.
On behalf of OMB Director Jenifer O’Neal, Bosede Bruce, Commissioner of the Department of Finance and Executive Director of the Public Finance Authority shared testimony regarding the overall health of the economy. Committee members were updated on the following: Construction and Real Estate, Public Finances, Tax Refunds, Revenues & Expenditures, Central Government Personnel, Collective Bargaining and Wage Negotiation, Rum Cover-over Rate, Resilience & Recovery, and the American Rescue Plan Act Update.
Despite global economic adversities such as inflation, high-interest rates, and supply chain shortages, the economy of GVI continues to improve post-pandemic. Currently, there is a moderate reduction in unemployment rates, according to Bruce. Although approximately 400 job vacancies were filled in FY 2022, compared to pre-pandemic data there are 1,390 jobs that remain unfilled for FY 2023. Regarding construction and real estate, Bruce noted that there is a sharp decline in building permits, private-nonresidential, and public housing. Furthermore, the 30-year-fixed-rate mortgage rates increased from 5.5% to 8.75% and construction costs increased due to supply shortages. Meanwhile, in public finances, there is a rise in operating revenues credited to an increase in both tax collection and non-tax collections. GVI’s expenditures also increased due to growth in net payroll and accounts payable disbursements, according to Bruce. Separately, Bruce indicated that a minimum of $5 million per month is distributed to residents in tax refunds. Additionally, an estimated $15 million was paid year-to-date (YTD) for numerous tax years. Regarding revenues and expenditures, Bruce mentioned that GVI has a total of five days of cash at hand. As of February 10th, the FY 2023 YTD revenues total $293 million. To date, a total of $331.6 million from the General Fund was expended, and approximately $59 million in Federal funds.
Presently, there are 5,060 classified employees, 1,396 unclassified employees, and 6,724 people employed by GVI. Out of the 6,724-employee population, 3,481 employees work in the St, Thomas-St. John District and 3,243 are in the St. Croix District. The numerical amount of temporary, part-time, and per diem employees are unknown, according to Bruce. Regarding collective bargaining and wage negotiation, Bruce stated that negotiations with six unions led to a total of 17 agreements. She added that there are thirteen expired collective bargaining agreements. Pertaining to the Rum Cover Over Rate, Bruce stated that approximately $52 million deducted from FY 2024 advance due in September 2023 are anticipated retroactive payments. This is in addition to the $64,625,000 deducted from the FY 2023 advance paid in September 2022. Separately, the Office of Disaster Recovery anticipates completing 44 projects this year and beginning additional projects worth an estimated $930 million. Lastly, the US Treasury awarded GVI $547 million in the Coronavirus State and Local Fiscal Recovery Funds (SLFRF). All SLFRF must be obligated by December 31, 2024 and expended by December 31, 2026.
Senator Frett-Gregory stated that the challenge is not only within the U.S. Virgin Islands but among states regarding how their governors are managing ARPA funds. By now senators should know the total projected expenditures for the ARPA funding. The information is needed for us to understand the economic perspective in totality. Transparency is needed.
The following senators attended the meeting: Donna A. Frett-Gregory, Marvin A. Blyden, Samuel CarriÃÅ’n, Diane Capehart, Javan E. James, Sr., Kenneth Gittens, Ray Fonseca, Novelle E. Francis, Jr., and Dwayne M. DeGraff.
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