Pay Me Now Or Pay Me Later

Is more borrowing really the answer? How would you cut government costs?

You don’t need an economics degree to know that the current pattern of borrow and spend is a path to financial destruction for the Virgin Islands.

The Territory started the fiscal year with a $280 million deficit, and it is predicted that the FY 2010 will duplicate that shortfall.  That’s a $600 million dollar hole.

The Governor has begun his public campaign to seek approval to borrow another $100 or so million from the Legislature – this in addition to the $250 million borrowed last year – that is earmarked to meet day-to-day operating expenses.

And the only alternative to this approach, we are told, is to lay off government employees and cut government services.

If you ran your household finances this way, you’d be starving, bankrupt and living on the street – and we may be if this pattern continues.

The Governor has been quoted as saying that the initial $250 million already borrowed will last until the summer, and that he is preparing a bond package for the next $100 million to submit to Senate President Louis Hill shortly.

Slow down Governor. We’ve got some other suggestions.

• Stop hiring people! You’ll never get out of this hole if you keep adding dollars to the same payroll you’re borrowing to cover. What happened to the hiring freeze? Are these additions we’re seeing essential personnel? How many “assistants” and “special project coordinators” do these agencies need when the financial situation is so dire?
• Call for an accounting to the Legislature of how the “lump sum” budgets have been spent in the first half of the fiscal year. Press department heads to justify questionable expenses. Don’t accept vague responses or promises to bring the documentation later – the problem is immediate.
• Much of the shortfall is attributed to faltering revenues, and many of those revenues are missing because of the ongoing dispute around property taxes going uncollected. We are all aware of the ongoing legal controversy on the tax question but we must repeat a question we have asked before – Why not collect the taxes we can, at the old rate, until the rest of the controversy is settled?
• On Wednesday, the Legislature heard testimony from numerous government agencies that revealed that millions of dollars in appropriated funds are sitting idle, waiting to be used for projects that have been on the books, in some cases, for years. Take a hard look to determine whether some of those projects are relevant anymore – we are sure there are some that are not – and, dare we say it, reprogram those funds toward operational needs.

The point is this – there are alternatives to continuing to borrow to get out of this mess. It is unrealistic to believe there will be any end to the deficits if some hard decisions aren’t made, and made quickly. We haven’t even begun to address the larger issues – the Government Employees Retirement Fund, the retroactive pay, the list goes on.

But you’ve got to start somewhere, and we’ve got to quit borrowing.

We’ve started the list. Readers, what do you suggest?

 Loading ...

Share on Facebook