USVI Budget Deficit Could Widen To $325 Million Post-Hurricanes Irma And Maria; Hospitals In Urgent Need Of Funds For Operations

ST. THOMAS — Members of the 32nd Legislature met on Friday with Governor Kenneth Mapp’s financial team, as well as officials from the territory’s two hospitals, for updates on the USVI government’s financial condition, as well as the state of its medical facilities, following the passage of Hurricanes Irma and Maria, which wreaked havoc on the entire territory, with Irma devastating the St. Thomas-St. John District, and Maria badly damaging St. Croix.

The USVI prior to the hurricanes was already cash-strapped, and suffered a structural deficit of over $100 million. With no access to the bond market, the Mapp administration had pursued belt-tightening measures throughout the government, including the executive branch, and changes in healthcare, to bridge the gap.

But Hurricanes Irma and Maria changed the entire trajectory, and placed the USVI in a severe hole, according to Office of Management and Budget Director Nellon Bowry. Mr. Bowry said the total fiscal year 2018 general fund budget, including debt service and tax refunds, is $914.8 million. The general fund revenues and resources estimate for the fiscal year 2018 budget totaled $833.9 million. “The indicated $80.9 million gaps would obviously be widened significantly by the expected revenue loss and additional unreimbursed expenditures resulting from the Hurricanes. The fiscal year 2018 budget gap could widen to as much as $325 million. Disaster-induced budget gaps will continue into fiscal year 2019 and fiscal year 2020,” Mr. Bowry said.

Excise tax is expected to help somewhat due to the constant shipping of items to the territory to aid with recovery efforts. But job losses and the steep fall in hotel revenues in the short-term, as facilities like the Ritz-Carlton and Marriott in St. Thomas close for repairs that could last up to a year — causing the displacement of hundreds of employees — will exacerbate the territory’s financial problems. “Individual income may decline due to job losses, and hotel revenues will decrease because of the loss of rooms available,” said Donnie Dorsett, senior policy analyst for the Bureau of Economic Research.

In addition to the governor’s financial team, the Government Health Insurance, hospitals and medical centers and the V.I. Department of Labor shared their post-hurricane updates.

In comparison to fiscal year 2017, annualized premium projections for the Government Health Insurance will increase by 5 percent for FY 2018. Beverly Joseph, chairperson of the Government Employee Service Commission, said, “All health insurance coverage combined will increase from $155.4 million in FY 2017 to $165 million in FY 2018. Comparatively, this is an increase of $9.6 million of which the employer share will be 65 percent,” she said, while participants’ share will be 35 percent. The Government Health Insurance coverage does not include Vision Care Insurance.

Bernard Wheatley, chief executive officer of Roy Lester Schneider Regional Medical Center (RLSH), stated that RLSH, the Charlotte Kimelman Cancer Institute and the Myrah Keating facility in St. John, were damaged as a result of the hurricanes. However, despite the structural challenges, some services are still available at these facilities, including emergency services, cardiology, hemodialysis, the intensive care unit, maternal child health services and laboratory services.

Due to the steady decline of patients, however, many of whom were evacuated to stateside facilities, Mr. Wheatley said RLSH needed a cash injection to keep the hospital’s door open.

Richard Evangelista, acting chief executive officer of the Juan F. Luis Hospital and Medical Center (JFL), shared similar sentiments. The roof and the infrastructure of the hospital were severely damaged. Over a hundred patients were evacuated and relocated to the United States. JFL is collaborating with federal agencies to assist with the disaster response and recovery efforts.

Lastly, updates from the Virgin Islands Department of Labor (DOL) include a report of severe damage to the St. Thomas office building, according to Catherine Hendry, the department’s commissioner. As a result, some operations were moved to the St. Croix offices, including processing of unemployment insurance for claimants, and the printing and distribution of unemployment insurance checks. DOL is also collaborating with the local and federal governments for recovery efforts.