Gov. John deJongh Jr. has submitted legislation implementing much of the fiscal austerity and government consolidation measures he laid out in his January State of the Territory address and, according to Senate President Ronald Russell, committee hearings will begin shortly.
According to deJongh, two of the bills—the Payroll Responsibility Act and Austerity Measures Act—are crucial first steps toward ensuring the government weathers the current fiscal crisis.
The laws freeze salaries for public employees until the end of fiscal year 2012 and impose several austerity measures to cut costs and increase revenues without curtailing basic government services.
“With our current and projected budget shortfalls, these two pieces of legislation must become law if we are to avoid a financial catastrophe and ensure we remain on solid footing through the worst recession of our lifetimes,” deJongh said in a statement Tuesday.
The Austerity Measures Act would also establish three unpaid holidays: Transfer Day, Holy Thursday (the Thursday before Easter) and the day after Christmas. It also implements a 1-percent increase in the gross receipts tax, a 2-percent increase in hotel tax, and a 911 surcharge of $1 on cell phones, a charge that already exists for landlines.
In a letter to Russell, deJongh said the Payroll and Austerity Acts are “intended as the beginning measures to address the depth and scale of our current budgetary crisis. They are “the first step towards regaining control of our budget,” the governor wrote.
The governor also submitted legislation to revamp the Department of Housing, Parks and Recreation, creating in its place a Department of Sports, Parks and Recreation. The reorganization aims to increase government efficiency, while renewing focus on public recreational parks and facilities.
According to deJongh, the renamed and reorganized department will work closely with the V.I. Department of Education to provide programs fostering better physical health for public school students. The legislation was submitted to previous legislatures, but never acted on.
According to Government House, the proposed measures will allow the U.S. Virgin Islands to avoid large-scale layoffs and furloughs of the kind seen in many other U.S. jurisdictions facing similar financial emergencies—measures that would further exacerbate the territory’s economic woes because the local government is the territory’s largest employer.
Reached by phone at his office Tuesday afternoon, Russell said the diverse parts of the legislative package will be scheduled for hearings before the various appropriate committees, with an eye toward some final action during legislative sessions scheduled for March 23 and 24.
"In many of the areas where he is proposing fiscal austerity, he may find some agreement with senators," said Russell. But he added that senators may disagree with parts and substitute their own alternatives during the hearing and amendment process.
"We intend to work together with the governor on this, but as the first branch of government we have ultimate charge of fiscal management and oversight," he said.