After Passage Of Sin Taxes, Democrats Reach Out To Community

ST. CROIX — Senate Democrats sat alongside each other at the Curriculum Center adjacent to the Superior Court on St. Croix, ready to explain to residents why they supported Governor Kenneth Mapp’s five-year economic growth plan, called the sin tax measure, which also included taxes on timeshare unit owners, along with a bill setting a base of $360 for property taxes.

In their remarks, senators gave a sense that there was no other reasonable alternative to solving the government’s fiscal crisis, whose budget deficit is well over $100 million, than raising taxes. And they pointed to the de Jongh administration — which borrowed hundreds of millions of dollars yearly to make up for the annual deficit — stating that the bond market has changed, and the government needed to find new ways of meeting its obligations.

“What’s different?” Senator Nereida Rivera-O’Reilly asked rhetorically, referring to the years of borrowing from the de Jongh administration. “That previous administration maxed out. Well, not really because we still have some capacity left to borrow. However, the market has changed the way they evaluate the territory because of what happened in Puerto Rico. So this administration came up to the crossroad and said, ‘We need to borrow, let’s do like the previous administrations have done to tie us over.’ And we couldn’t do it because we never thought, in those eight years where we borrowed $800 million to operate the government, that this day would come.”

Mrs. Rivera-O’Reilly said analysis from the Bureau of Economic Research revealed that if the government were to layoff 1,400 employees, it would save $29 million; to save $173 million, the government would have to layoff 3,500 employees.

Pointing to the devastating consequences of such an action, Mrs. Rivera-O’Reilly said, “Thirty-five hundred employees is more than we lost when HOVENSA closed, and I don’t need to remind you what the impact was of the loss of 2,500 jobs to this island and the territory overall.”

Questions on the sin taxes and the Government Employees Retirement System dominated the discussion. However, while senators managed to explain their reasons for raising taxes, they were less clear on what they would do to save the pension system which, according to ratings firm Moody’s,  has an unfunded liability approaching $4 billion. Senator Neville James said that G.E.R.S. was to be given credit for surviving this long, especially in light of the 2001 Enron collapse, which affected many pension systems in the U.S. And Mr. James pointed to efforts by former legislatures, including the 31st, to shore up G.E.R.S.

But there were no immediate ideas to salvage a pension system that needs billions to survive, when the Government of the Virgin Islands can’t access the bond market to borrow $120 million.

Senators were split on the idea of medicinal marijuana, with Mr. James advocating for the inclusion of locals who sell the drug illegally in the passage of any legislation legalizing medical or recreational use — a stance taken by Senator Alicia Hansen, who was not present at last night’s town hall as she’s not part of the majority caucus. Senators Kurt Vialet and Mrs. Rivera-O’Reilly indicated their opposition to marijuana; Mr. Vialet pointed to the drug’s federal regulation, stating that a trip to Hotel on the Cay with marijuana would not be possible because the waters are controlled by the federal government. On medicinal use, he said, “States that have more sophistication in terms of developing regulations than the Virgin Islands, have taken five and six years to come up with the regulation in order to structure the market to make sure that the product that they’re getting is pure. It takes a long time and we need money today, not five years down the road.”

And Mrs. Rivera-O’Reilly told a young man who had used an analogy including a young daughter, that if he had a girl child, his position on the drug would be different. “Maybe when you have one and she goes to dance class you’ll feel different about marijuana,” she said.

One of the most pointed questions sought to understand why senators had waited until passing the sin tax and property tax laws to reach out to the community.

“First of all, all the discussion that was happening was never brought to the people. I get it, these are just 9 minds, and maybe you ran out of visionary ideas, or maybe you’re just not having enough pay, to have a vision. But if you had brought it to us from the beginning, maybe we could have sat down as people and come up with something,” said Emanuela Perez. Senators generally agreed.

“Perhaps moving forward it is something that we truly need to do as a body,” said Senator Novelle Francis, who later added, “We take the criticism as constructive and as we focus forward like I like to say, I truly believe that yes, we’ll come out and hear from you in the future, and I think that that would allow for better communication level.”

All members of the majority caucus was present for the town hall.