ST. THOMAS, USVI – The Committee on Budget, Appropriations and Finance, chaired by Senator Novelle E. Francis Jr., convened at the Earle B. Ottley Legislative Hall to continue its review of the Fiscal Year 2026 Executive Budget. Lawmakers received testimony from the Virgin Islands Department of Tourism, the Bureau of School Construction and Maintenance, and the Governor’s Financial Team, as each entity outlined its funding priorities, operational needs, and fiscal outlook for the upcoming year.

Jennifer Matarangas-King Commissioner Nominee for the Virgin Islands Department of Tourism delivered testimony. The recommended budget for Fiscal Year 2026 is $39 million, aligning directly with the approved budget for Fiscal Year 2025. This allocation is intended to fully support the department’s operational requirements, including salaries and fringe benefits, contractual obligations, office operations, and the functions of specialized divisions such as Offshore Sales, Film, Visitor Experience, and Festivals.  Defending the budget, Matarangas-King noted that DOT reaffirmed its commitment to responsibly executing its mandate to market and promote the Territory within the approved Fiscal Year 2026 appropriation.

The FY 2026 budget breakdown is as follows: $2,602,727 for personnel services, $1,134,774 for fringe benefits, $522,000 for supplies, $34,495,499 for other services and charges, and $245,000 for utilities. Senator Francis inquired about outstanding vendor payments, including those owed to tourism greeters. In response, Commissioner Nominee Matarangas-King reported that the Department of Tourism has a total of $1.3 million in unpaid obligations. Of this amount, approximately $300,000 is currently pending within the payment system, while the remaining $1 million remains outstanding. She assured lawmakers that DOT is actively working to address and mitigate these payment challenges. Senator Francis reiterated that timely payments to vendors are critical to maintaining trust, ensuring the continuity of essential tourism services, and upholding the Territory’s reputation as a premier destination.

Hotel tax collections underscore the Territory’s continued growth in the tourism sector. As of June 2025, year-to-date revenues totaled $41.5 million, reflecting an 11 percent increase over 2024 and a 27.2 percent increase compared to 2023. At this pace, the Territory is well positioned to surpass the record $57.8 million in hotel tax collections achieved in 2022. Shared economy lodging across all three islands remains a significant contributor, generating $325.1 million through June 2025, an increase of 10.7 percent over the prior year. Cruise tourism also continues its rebound. In 2024, St. Thomas welcomed 1.53 million passengers, 10 percent above 2019 levels, while St. Croix recorded 169,228 passengers, a 203 percent increase. Overall, cruise arrivals grew 17 percent between 2019 and 2024, and with industry recovery and fleet expansions projected through 2028, the Territory anticipates an additional 21 percent increase during the 2025–2026 season.

Dr. Charmaine Mayers, Chief Financial Officer of the Bureau of School Construction and Maintenance, testified on behalf of Executive Director Craig Benjamin regarding the agency’s FY 2026 budget request. The Office of Management and Budget has recommended an operating budget of $4,762,952.80 from the General Fund, representing a $2,190,738.20 reduction from the FY 2025 level. In addition, Act 8717 mandates $5,000,000 annually from the Bureau’s Capital Fund to support school maintenance and facility improvements across the Territory. Combined, the Bureau’s total recommended budget for FY 2026 is $9,762,952.80. Dr. Mayers emphasized that the funding supports the Bureau’s mission to ensure safe, functional, and well-maintained learning environments for students and staff. The FY 2026 Miscellaneous Fund allocation includes $660,000 for personnel, $1,245,153.26 for fringe benefits, $1,260,000 for capital outlays, $180,000 for supplies, $7,500 for utilities, and $416,000 for other services. Following her testimony, legislators highlighted the importance of accountability and oversight in managing these funds. Senator Avery L. Lewis urged the Bureau to remain engaged in the contractual process, to monitor maintenance work for quality assurance, and to keep stakeholders informed of methods and procedures to ensure consistency and functionality across all schools territory wide.

In addition to the Bureau’s testimony, the Legislature heard from the Governor’s Financial Team, which provided a comprehensive overview of the Territory’s broader fiscal position. Julio A. Rhymer Sr., Director of the Office of Management and Budget, reported that the proposed FY 2026 budget totals $1.76 billion, including $936.4 million from the General Fund, $68.8 million from other appropriated funds, $691.9 million in federal funds, and $62.6 million in non-appropriated funds. Federal grants are projected to rise 237 percent to $20.65 billion, driven by disaster recovery funding, with $643.5 million in project spending expected to generate $139.2 million in revenues. For FY 2025, General Fund revenues are forecasted at $889.1 million with an expected $11.7 million surplus due to controlled spending. 

The Government maintains a $150 million credit line with $91 million outstanding and $58.9 million available, while cash balances total $37.2 million and the Budget Stabilization Fund holds $12.6 million. Outstanding vendor payables stand at $50.1 million. Year-to-date, $1.2 billion in expenditures have been made, with 66.5 percent spent locally. Senator Francis expressed concern over the $50.1 million in outstanding vendor payables, underscoring the need for timely payments to maintain financial credibility and support the local economy. The economic outlook remains positive, with 3.5 percent unemployment, 69.9 percent hotel occupancy, and 1.42 million arrivals through June 2025. The government workforce totals 9,941 employees, and health insurance costs rose 9.7 percent to $226.1 million, with plan changes for FY 2026 introducing higher premiums and deductibles alongside new reimbursement accounts. 

Senators present at the meeting were Chairman Novelle E. Francis Jr., Marvin A. Blyden, Dwayne M. DeGraff, Ray Fonseca, Clifford Joseph, Hubert L. Frederick, Carla J. Joseph, Milton E. Potter, Avery L. Lewis, and Kurt A. Vialet. 

The Division of Public Affairs is committed to providing the community with accurate information on legislative proceedings and other events at the Legislature of the Virgin Islands. Visit legvi.org. 

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Press Contact: Africah N.T. Harrigan

Email: aharrigan@legvi.org