Home News Local news FY 2006 Budget Comes in at $611 Million, $45.6 Million Over 2005

FY 2006 Budget Comes in at $611 Million, $45.6 Million Over 2005


May 27, 2005 – Gov. Charles W. Turnbull released the $611.1 million 2006 Executive Budget on Friday. It is $45.6 million over last year's budget request and $43.6 million over what the Legislature approved for fiscal year 2005.
It includes salary increases for union and non-union executive branch employees that were approved by the Legislature earlier this year.
"As this administration undertakes the critical task of planning for a better tomorrow for the citizens of this territory, I am reminded of one of our most valuable resources, the employee of the government of the Virgin Islands, who will be required to implement positive changes needed to move this government forward," the release quoted Turnbull as saying.
In a May 5 Senate session, the legislators appropriated $10 million from the General Fund to finance the negotiated union contracts.
At the time, Senate President Lorraine L. Berry urged her colleagues not to vote for the measure, saying the Office of Management and Budget had projected a $60 million deficit, the result in part of the hatchet job done by the U.S. Congress on the territory's Economic Development Commission tax benefits program.
It did not dissuade her colleagues from approving the measure with an 11-4 vote. (See "Senate Approves Economic Stimulus Bill").
Turnbull said he believed that through "fiscal restraint" coupled with "expanded revenue collection efforts" and "revenue initiatives," the government would make up for the projected $60 million loss and be able to meet the increased budget.
He also said increases in rum rebates and property tax collections were expected to increase revenues by $45 million.
The owners of Cruzan Rum recently tried to enter into a joint venture with the V.I. government to produce more rum in the territory that would be marketed under a different branded label. This would come in exchange for a split on the $13.50 per gallon that the territory gets back through the Internal Revenue Matching Fund. Cruzan International, formerly Tod Hunter International, a subsidiary of Trinidadian-owned Angostora Ltd., would get $6 of the rebate per gallon. The government stands to substantially increase the rum rebates under the contract.
However, the release about the budget Friday did not say whether the projected $25 million increase over fiscal year 2005 was part of that deal, which has not been finalized, or whether it was a natural increase because of more production of Cruzan Rum.
The $20 million in increased revenues from property tax is attributed mostly to timing. Due to a lawsuit and subsequent order from the court, property tax collections were suspended for a period of time in the two last fiscal years. With the ban on collections lifted, the revenue projection shows an increase. However, $3.7 million is already earmarked for infrastructure improvements pursuant to Act 6595, pushed through the 25th Legislature by former Sen. Emmett Hansen.
A more thorough read of the expenditure and revenue numbers shows that total General Fund revenues are expected to be $579 million, while total General Fund expenditures ring in at $600 million. The difference is still being made up by transfers from funds not designated as operating funds. In fact, the Internal Revenue Matching Funds have historically been assigned to capital projects.
When contacted Friday night, Berry said she couldn't comment on the budget because she had just received it and had not had time to review it.
Ira Mills, director of the Office of Management and Budget, could not be reached for clarification or comment.
For a look at the 463-page document click here .
Cherise Jarvis, Senate Finance Committee chairman Norman JnBaptiste's chief of staff, reached late Friday night at the senator's office, said budget hearings would begin July 1 and run through Aug. 25.
The press release — sent from Government House to the media before the budget document was actually available — noted that Turnbull had submitted the budget three days before the legal deadline of May 31.

Back Talk

Share your reaction to this news with other Source readers. Please include headline, your name and city and state/country or island where you reside.


Please enter your comment!
Please enter your name here