What Did The Senate Accomplish On Tuesday?
Prophetic Words and Images from the march in May, 2010. Has the last nail finally been hammered into this coffin?
Just what did the Legislature accomplish yesterday?Â
They authorized one hundred and twenty million dollars in new borrowing – taking the Territory into more than one billion dollars of collective debt and supported with no revenue stream the Governor found acceptable to collateralize it – and what problems will it solve?Â
And why borrow it now?Â
Despite evidence to the contrary, those who supported the borrowing used threats of imminent disaster to try to bully the public into believing that if they did not do this, right now, that today the lights would be out.Â
After a late start, the Senate spent another two hours bashing the media for protesting their three days of secret meetings; bashing Sen. Craig Barshinger with accusations of comments that no one in their right mind believes he made; rambling on through a resolution about solar panels that the Delegate to Congress Donna Christensen later said was a waste of their time (but included conversation about the task force they’d need to put together to go to Washington to help her explain the initiative); and resolving to hold an “economic summit’ later this year – for what? What economy?Â
And then there were the two bills – one to authorize the Governor to borrow yet another $120 million and a second to raise gross receipt taxes from 4.5% to 5% to fund the borrowing. The first one passed – by a vote of 10-5; the second one didn’t – by a vote of 8-7.Â
And the lackluster measures attached to the borrowing bill that were supposed to represent “funding” would give no lender confidence in making the loan. The defeat of the gross receipts measure all but rendered the borrowing bill moot.Â
Not that borrowing was ever a good idea. Why would we borrow money to pay WAPA to pay Hovensa? What happened to the fund that was supposed to pay the tax refunds? How long will what’s left of this $120 million fund the bloated government payroll?Â
In the end, the money – if anyone had actually been willing to lend it – would have made an insignificant dent in a long term problem – which is the accumulated debt created by this Administration’s fiscal mismanagement, and the failure of this Legislature to push back hard against its threats and deceptions. The millions of dollars we gave away to Diageo alone would cover the current fiscal year deficit.Â
And still we did not hear one substantive proposal from the Administration on permanent cost cutting in the government. It’s all borrow and tax. And even while the Senators were meeting to give him even more money to squander, he continued to fire non-management government workers.Â
So it’s back to square one and the only solution on the table is the continued termination of government workers.Â
Where we need to be is at the table with Hovensa getting a real idea of what the closure will mean in financial terms and what we can and should expect from them before and after they pack up their bags and leave St. Croix with the toxic remnants of their 45 years. Then and only then will we know the true impact of their departure, short and long term.Â
Where we need to be is in session with each and every department and agency head, freezing their budgets, going line by line through expenses and conducting job audits to see what positions are productive, and which are not.Â
What we need to recover is the $6.9 million stolen through improprieties and identified in the Legislative audit; what we need to recover is the outstanding taxes from our elected officials.Â
We really had to laugh when we read the Governor’s statement today reacting to the Senate session, stating that the law prohibits the government from issuing checks when there is no money to back them and “we shall obey the law.”Â
There’s a switch. The law said you couldn’t spend that $500k on Mafolie either, and you still haven’t paid that back. “Obey the Law” indeed.Â
Yesterday, we heard that Hovensa was the villain in this most recent act of this destructive saga.Â
But let’s not fool ourselves. Hovensa isn’t the only problem; it’s just the newest problem. And what happened in the Legislature on Tuesday didn’t solve any of our problems.
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If you do away with the Gross Reciepts tax, it would make sense to impose a sales tax..But the Governor/Legislature has taken away that option by tying the last three million dollar loans to the Gross Reciepts tax..
To impose both a Gross R tax and Sales tax would kill all Virgin Islanders…
mr bryant if we had the money to pay them then they could just keep there jobs, so ow some how your going to spend money to retrain and assist them? what money is this, you going to pull a wealthy rabit out of your hat?
face it no one wants to loose there job, i dont want to fire anyone but th reality isif you cant pay them you have to do something.
I run a small bussiness-via leac i can no longer pay my employees, I feel bad about it but there is no money so they have to go, thy understand this andthey havent offered to work for free so we are parting compny on asad but alright note, thy kno me they knw how the bssinss is struggeling they dont xpct me to give them what i dont have.
now how come goverment workers are so different than mine? i dnt see laws and reulations requireing the people of the teratory save my my emloyees? they arnt talking about taxing tourist to save me, no rainmantax on everyone elseto keep me making a profit, so yes its tough, yes its gonna hurt but as a honnest man and a bussiness man i had to make the hard decisions. ask any crucian moher about having to decide to cut spending, ask them how do you lkeep the power on and feed the family. it comes down to hard work and sacrefice.our senators could learn much from the others and fathers on this island that have to make hard unpopular decision every day.
If it wasnt a recall of deJongh, nothing was accomplished
@rainman, deJongh vetoed the austerity measures to take away cars and cell phones. Instead he fires teachers and health care providers who voted for Mapp. It is okay to cut when things are bad, but he doesn’t cut the fat, he cuts the meat. and not his meat. Ask him why Yvette Arnold and Anita the Indian have bogus $85000 jobs in Education and are not teaching. Ask him why David Paul is making $300,000
Who is David Paul? Does he have a NOPA for $300k?
He has a contract for $300k
I googled him – he’s a Public Finance Authority Consultant
Interesting to read old news – this is from July 12, 2010
http://virginislandsdailynews.com/news/pfa-closes-on-399-million-bond-sale-to-shore-up-v-i-1.886726#axzz1kgwrYRp9
The deal is done.
The V.I. Public Finance Authority closed on a $399 million bond package Friday at the lowest interest rate the territory has gotten in years.
“While the Virgin Islands is having difficulty with the General Fund, because the revenues are down due to the recession, the institutional investors are very comfortable with the debt structure that the Virgin Islands has developed,” PFA consultant David Paul said in an interview.
The bonds were sold at an average interest rate of 5.15 percent and were given lower-medium-grade investment ratings by the three ratings agencies.
According to Paul, investors placed $1.1 billion in orders for the $399 million in bonds.
PFA bond counsel Patricia Goins said that investors are attracted to Virgin Islands bonds, because interest earnings from bonds in all U.S. territories are triple tax-exempt — or exempt from local, state and federal taxes.
The PFA also benefited from historically low interest rates, selling the $399 million bond package during a week when mortgages rates hit their lowest point on record.
The V.I. government plans to use the bond proceeds to pay off $200 million borrowed from local banks last year and to provide $150 million to shore up the government’s finances through Fiscal Year 2010. Of the remainder:
• $40 million went to the bonds’ debt service reserve fund.
• $2 million went to bond discounts.
• $7 million went to costs and fees associated with the issuance of the bonds.
Gov. John deJongh Jr., who serves as chairman of the PFA board, issued a statement thanking the investors for their eagerness to buy the bonds.
“I greatly appreciate the support shown to us today from across the investment community,” he said. “Through that support, we have been able to continue to avoid the layoffs and furloughs of government employees that we have seen in states across the country.”
This is the second round of borrowing the government has executed within the last 12 months to avoid cutting jobs.
Last year, the Senate authorized the government to borrow $250 million, with restrictions. The V.I. government had to borrow from any internal funds first, and it had only until 2017 to repay the money.
The government first borrowed $43.6 million from the Insurance Guarantee Fund, and then in July 2009 it opened a $206.4 million line of credit with a bank syndicate formed by Banco Popular and FirstBank.
Two months ago, the Senate authorized an additional $250 million, raising the borrowing ceiling to $500 million of loan principal, which does not include closing costs or other fees associated with borrowing the money. Senators also increased the maturity on the borrowing, giving the government 20 years to repay the money.
On June 11, the PFA board voted to float bonds to pay back $200 million it borrowed from the banks and to get an additional $150 million in working capital.
Is Mr. Paul a local?
Have you seen this?
https://www.facebook.com/groups/ourmovenow/
“This is an incubator for potential solutions to address the current financial and for restructuring for the longer term as well. All ideas are welcome. We encourage ideas that will foster stablization, mitigate the economic impact for the current influx of unemployed workers, and develop a plan to rebuild the financial state of the Territory in both the near and long term.
This is a closed group that requires approval of request to join. We encourage everyone who wants to be a part of the solution to join this group – and to bring anyone who wants to participate to also join.
If you would like to be a part of the evaluation process and in putting together a package we can present on the floor of the legislature, please email the group’s email…”