Home News Local news V.I. Economy Gets Mixed Review

V.I. Economy Gets Mixed Review


Nov. 3, 2005 –– The territory's economy is in the midst of an economic expansion, Gov. Charles Turnbull said in a recent press release.
"The economic expansion is the result of hard work and sacrifices on the part of the people of the Virgin Islands," he said.
He said his administration chose economic reforms to spur private and public sector development while maintaining a balanced budget as well as a stable and accountable economy.
"Our goal now is to achieve the creation of more, higher paying private sector jobs, better and more affordable housing, as well as improved education, health care and public safety," he concluded.
Lauritz Mills, who heads the Bureau of Economic Research, said that all revenues were up nearly 30 percent in 2005 over the previous year. She said this was a strong indicator of how well the economy is doing.
According to a press release from Soury Communications, which does public relations for the territory in the financial field, gross receipts revenues rose 11 percent in 2005 over 2004. Corporate income tax, which serves as a measure of business activity and profits, was up 89 percent. Gross receipts taxes went up 11 percent. The stamp tax went up 15 percent and personal income tax revenues rose 5 percent. Revenues have risen without a tax increase.
Mills said the Economic Development Commission tax benefit package has attracted high-end companies, an affordable housing program is providing homes for residents and a government-sponsored health insurance program will provide insurance for employees in small businesses and self-employed workers.
The Soury Communications press release cites numerous projects that are contributing to the territory's economic expansion. On St. Thomas, this included the $150 million rebuilding of the Yacht Haven Marina and Hotel, the construction of a $63 million Sapphire Beach Recreational Center, and the construction of a $40-million Marriott timeshare development. Additionally, the $31 million Crown Bay Marina and retail center is nearing completion.
On St. Croix, they include a $400 million expansion at Hovensa on St. Croix, the construction and the planned construction of a beachfront hotel, marina and casino by the Mashantucket Pequot Tribal Nation.
St. John has the Grande Bay Resort underway.
While several of the territory's business owners concurred with the governor's assessment, at least one St. Thomas businesswoman sees it differently.
Judi Nagelberg, who owns the St. Thomas-based Island Meetings and Incentives, said that her company has seen a slowdown in group travel.
"The economy in the states is not at its best. Corporate people are being careful," she said, citing factors like the high cost of fuel and gas as impacting businesses.
She also said that Homeland Security mandates that charter boats provide lists of passengers before they depart the territory and when they return will have a big impact on her business. She said boat captains who find it difficult to comply will move to Tortola, thereby leaving no boats for her visitors to use.
And she said that other places are building new hotels that will attract meeting and incentive guests.
However, she noted that the Yacht Haven Marina project has the potential to bring in high-end visitors.
Joe Aubain, director of the St. Thomas/St. John Chamber of Commerce, said anecdotal evidence indicates that the island is doing well.
"The hotels are doing very well and will have a good season," he said.
He said retail stores were slow during the summer, but Aubain anticipated that cruise ships forced to change their itinerary from hurricane-ravaged destinations will instead call on St. Thomas. This will send more passengers into the shopping districts.
St. John businessman Albert Willis said he too believes the economy is on a firm footing.
"Growth in the private sector is spurred on by the EDC tax exempt legislation," he said.
Two St. Croix businessmen are optimistic about the island's future, but one said St. Croix's economy has not yet begun to improve.
"The man on the street does not have extra money," Noel Loftus said.
He said that while the government does have more revenues, St. Croix doesn't have more of the much-needed jobs.
Loftus pointed out that St. Croix lost 40 to 50 jobs when Pueblo closed its Sunny Isle store.
Ben Rivera, the St. Croix Chamber of Commerce's director, called on the federal government to help by building things like a military base on St. Croix.
"Guam has a military base," he pointed out.
He also said that issues surrounding the EDC program need to be resolved to help the economy grow.
Rivera called on residents do to their part by developing entrepreneurial skills. He said that many residents have such skills developed through the territory's large underground economy, but those skills need to be fine tuned.
"And the government needs to cut payroll," he said.
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