United Steelworkers Union Says Sin Taxes Are Regressive, Any Measure Should Include Restoration Of 8 Percent Salary Cut

ST. CROIX — The nonstop pressure from various groups in the community calling on Governor Kenneth Mapp to abandon his sin tax measure — which the governor says is aimed at raising revenues to eliminate the territory’s structural deficit — and on senators to vote against it, has only amplified as the bill moves through the Senate.

Today, it will be heard in the Committee on Finance, chaired by a supporter of the sin taxes, Kurt Vialet.

A wide swath of Virgin Islanders have dissented, so too has a coalition of private sector businesses territory-wide (the latter of which also offered alternatives). And in an interview with The Consortium on Friday, United Steelworkers Union Director, Daniel Flippo, expressed his displeasure with the measure, labeling it as “regressive.”

“As it relates to the sin taxes, although we appreciate the governor’s thought process in trying to come up with different revenues, we believe the taxes that they’ve proposed are regressive. It doesn’t help,” Mr. Flippo said. “On one hand it gives people money that they’re due, and on the other hand takes it back through regressive taxes,” he said, referring to a provision that’s no longer in the bill that would have restored, over the course of two years, the 8 percent salary cut that was implemented by the de Jongh administration, which the United States Court of Appeals for the Third Circuit found to be unconstitutional. 

The appellate court’s decision overturned a September 2014 lower court ruling in favor of the government. The ruling gives unions the opportunity to take the case to an arbitrator. However, Mr. Mapp said in December said that he would direct the Attorney General’s Office, as well as the Office of Collective Bargaining, to ask the unions to wait on taking any action and allow the G.V.I. to make good on its promise of restoring the 8 percent salary cut. Mr. Mapp said he’d also directed the O.C.B. to halt all negotiations with unions until the matter was resolved.

But with the provision’s removal from the sin tax bill, Department of Finance Commissioner and Public Finance Authority Director Valdamier Collens said the government no longer had a funding source to make good on its promise.

“The 8 percent should be included in any legislation because it’s been ruled to be unconstitutional — and they didn’t waste any time doing it, so they shouldn’t put off any time in giving our members and the government workers their 8 percent back,” Mr. Flippo said. “On top of that, what a lot of people don’t know, the supervisors of the government have not had a wage increase since 2008, and then they had the 8 percent taken away. So it’s just morally not right not to include the 8 percent. You got supervisors making less than the people they are supervising.”

The union met with senators last week to offer help; senators, according to Mr. Flippo, said they removed the 8 percent restoration because they believe the territory would be looked upon in a more favorable light by the bondholders, “because you’re looking forward, not back,” Mr. Flippo said.

The Steelworkers Union represents 1,900 employees in the territory. In District 9, which includes 7 states in the southeast of the U.S. and the U.S. Virgin Islands, it represents 60,000 people, and 850,000 internationally, which include the U.S. and Canada. Mr. Flippo said the union would mobilize its members in opposition of the sin tax bill. “We’re strong, and we’re prepared to use that strength to help our members here,” he said. “The working people of the islands have all been taxed enough. They need to find additional ways to [generate revenue].”

He added that the union would utilize its Rapid Response Network, which educates union members on legislative issues and works through different actions to accomplish tasks — including call centers, bulk email transmission and even rallies.

“We’re looking on how to educate, energize and mobilize our members so that they can then use that within their communities to make certain that the senators and the governors understand that it’s time for working people to be put at the top of the list, and in the islands, they haven’t been,” Mr. Flippo said.