Money – where it is, if it is and, if so, how it is being spent – kept legislators' attention Tuesday in a long and often confusing meeting of the Senate Finance Committee.
Committee chair Lorraine L. Berry called the session in an effort to clear up questions the senators had about the territory's finances, However, more questions were raised than answered to the body's satisfaction.
Among the top fiscal administration officers testifying were Office of Management and Budget director Ira Mills, Finance Commissioner Bernice Turnbull, Bureau of Internal Revenue director Claudette Farrington, Personnel Division director Joanne Barry and Rudolph Krigger, Gov. Charles Turnbull's special assistant for fiscal policy and financial affairs.
Berry charged that the Legislature was misled last October when it was persuaded by administration officials to approve a $300 million bond issue to meet four payrolls and cover vendor payments and income tax refunds. "We passed on the issue because we were told the government would have four payless paydays coming up," she said after Krigger testified Tuesday that only $12.1 million of the projected $39 million cash shortfall in fact occurred and had to be covered by bond money. Krigger attributed this to unexpected revenues.
"I don't know who makes your projections, but, with all respect, they don't know what they're doing," Berry charged. Krigger countered that "Projections are projections; they are based on assumption." This explanation didn't sit well with the senators.
Contradictions abounded at the meeting. Referring to Bernice Turnbull's prepared statement, Berry said to the commissioner, "Surely, you are being cute." Turnbull cited a 1954 section of the Revised Organic Act to explain the delayed fiscal year 2000 budget.
Turnbull said $43 million of the $46 million allocated from the bond proceeds to pay vendors has been paid out. But she said at least another $50 million is owed. The issue of how much is actually owed vendors was bounced from one fiscal officer to another without a clear figure emerging. When Sen. George Goodwin asked Krigger what really is owed to vendors, Krigger deferred to Turnbull, who replied, "I really don't know." Mills said the amount was such that "If I stood up, it would knock me over"and said the reason was that payments owed vendors without contracts were not entered into the computerized Financial Management System.
The proposed Water And Power Authority sale came up briefly. Krigger said he wanted "to state emphatically that the governor did not put WAPA on the block." He said Southern Energy's proposal to by the utility was unsolicited. He also said the government is not required to seek competitive bidding when it disposes of a non-surplus property — a comment counter to the contention of St. Croix resident Gail Watson Chiang, who has vowed to file suit against the government over the no-bidding issue. Sen. Anne Golden asked the legislative legal counsel to see whether the V.I. Code empowers the governor to negotiate such a sale and received an affirmative answer back.
Mills was asked how the government's obligation to reduce payroll by 5 percent, as mandated in a Memorandum of Understand signed with the Secretary of the Interior last year, would jibe with the governor's plan to implement employee step increases. Mills said that the governor has planned a summit with labor leaders in the next few weeks to discuss this.
Updating the senators on the government's fiscal situation, Mills said projected revenues for FY 2000 now stand at $439.1 million. The legislative appropriation is $451.3. He said OMB has set the FY 2000 ceiling at the level of projected revenues, leaving a deficit of $12.2 million.
Farrington, asked about the status of income-tax refunds, said she had inherited unpaid refunds owed from 1997 when she took over her post. She said $78 million of the $134 million in bond proceeds assigned to meet prior years' refunds has been processed. She said IRB hopes to have the process finished by April 17, this year's personal income tax due date, and to have some bond money left over for 1999 refunds.
Golden asked Mills about overtime data for the Bureau of Corrections, Fire Services and the Police Department. The total submitted for police was $2,679,844. She asked if these amounts had been cut by 50 percent as outlined in the MOU. Mills replied, "Not even close."
Golden wanted to know how much of the police overtime went to security for the governor and lieutenant governor, charging that the overtime personal security racks up is disgraceful. Mills said a meeting of OMB and Police Department officials to discuss that is coming up soon.
Barry was asked how many employees were on the executive branch payroll as of Jan. 4, 1999, and as of Dec. 31, 1999, and to furnish a table supporting the information. She said she could not do so because Personnel cannot print reports from the payroll module of the computerized Financial Management System.
Two things could significantly impact on the fiscal situation: the proposed Government House summit meeting next month with union leaders, and the submission of a report from the governor's Financial Recovery Team that is due Feb. 29. Chief labor negotiator Karen Andrews said the administration will seek a compromise with the unions. Information she furnished showed a total of $262.7 million in retroactive wages owed, with $111.8 million of it due to educators and nurses.


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