Like a family tightening the household budget,
the Virgin Islands has to make some tough choices about where to cut the budget and by how much, legislators said during last week’s House of Assembly sitting.
“The BVI has come to a fork in the road in our history,” said Deputy Premier Dr. Kedrick Pickering during the sitting, adding, “We have as a country to decide what it is we want for our country moving forward.”
After weeks meeting as the Standing Finance Committee and a two-day public debate, legislators passed the Appropriations Act, 2012, on Friday evening. The act puts the VI’s 2012 budget into law.
The Ministry of Finance will release the official budget estimates after Governor Boyd McCleary assents to the Appropriations Act, but according to figures given during the debate by opposition member Alvin Christopher (R-D2), revenue is estimated to be $289,545,000 while expenditures are estimated at $259,383,900. Both figures are up somewhat from those given in Premier Dr. Orlando Smith’s January Budget Address.
Meanwhile, expenditure estimates are down by $1,576,100 from last year, while revenue is projected to be up by $1,661,000.
Despite the $30 million surplus anticipated for 2012, cutbacks are necessary now to avoid deeper cuts in the future, Dr. Smith said Friday, adding that government doesn’t want “what happened in St. Thomas and Bermuda” in the VI.
In December, United States Virgin Islands Governor John De Jongh Jr. announced that 500 public sector jobs would be cut this year, while Bermuda officials announced last month that they were looking to reduce public employees’ wages by eight percent.
Dr. Smith said the VI has been on shaky financial ground at times in the recent past.
“There was a running deficit,” he said. The premier and other legislators recounted previously announced money-saving moves such as a reduction in incremental pay raises for public officers, a pay cut for legislators themselves, and a reduction in the money government gives to statutory bodies like the BVI Tourist Board.
“We are having a reduced budget in most areas because of our restraints,” the premier said. Government was able to “balance” the budget by doing away with most re-votes, said Dr. Smith, who is also the minister of finance. He had promised the move during his January Budget Address.
Re-votes are unfinished projects whose funding in the budget is carried over from previous years. “The fact is that too often these projects were not funded,” Dr. Smith continued, adding, “The money was basically not there in the Development Fund. Over the years we continued to carry these re-votes on our books, which was essentially paper money.”
Raising revenue
In addition to cutting costs, raising the revenue that government brings in is also a goal for this budget, Dr. Smith said. For example, government is looking at ways the BVI Tourist Board can earn revenue, he said.
Other government outposts, such as the H. Lavity Stoutt Community College bookstore, cafeteria and Road Town bakery, should be earning money and not losing it, said backbencher Archibald Christian (R-at large). Between those three entities, Mr. Christian said, more than $1 million was lost last year.
“How can this be? Who is monitoring what is taking place in these three departments?” Mr. Christian asked his fellow legislators.
Opposition Leader Ralph O’Neal proposed that the territory should be earning money on its savings.
“I cannot agree to the reserve fund lying there in the bank without getting any kind of interest,” Mr. O’Neal said, adding, “The interest rate we get now is almost nil.” Mr. O’Neal pointed to the Social Security Fund as an example of how public funds can grow with the right management.
Budget process
Several legislators said they want to see the process by which the territory passes its budget revamped.
“We can’t continue with that sort of a process,” Dr. Pickering said, adding that the current process is too long and “burdensome.”
“I hope next year we can take a much better approach,” he said.
Backbencher Delores Christopher (R-D5) was in favour of shortening the budget process.
“We need a system that will allow for a shorter timeframe,” Ms. Christopher said, adding that a system that relies more on technology might be faster.
While agreeing that the process should be shortened, a new system shouldn’t come at the cost of a thorough review by representatives, Mr. Christopher said.
“I would like to get my information in time so that I can go over it and I can come before the people and make my contribution,” he said.
Opposition member Julian Fraser (R-D3) urged government to be as transparent as possible in its re-organisation of the budget and the budget process. He cautioned leaders that the issue of re-votes is confusing.
“We need a paper trail for that money,” Mr. Fraser said. “It’s not difficult, Madame Speaker, it’s just tedious.”
The Ministry of Finance is in the process of transitioning to a three-year budget cycle, Dr. Smith said, adding, “It will be much more efficient next time.”
Priority projects
During the debate, government ministers told the House what some of the plans and priorities will be for the coming year under their respective portfolios.
For Dr. Pickering, the environment is key, he said.
“We have to tell ourselves that we can’t continue to keep doing things the same old way,” Dr. Pickering said. “We must do what we have to do to see what we’ve destroyed and to rebuild it.”
Dr. Pickering went on to say that in the East End/Long Look area, repairs at the community centre are a priority. He said that between himself and backbencher Marlon Penn (R-D8), “We’d desperately like to get that Greenland Field completed.
“We are going to work desperately hard to see how best, with the limited resources that we have, to get that field functional,” Dr. Pickering said, adding that residents without a recreational space are “suffering daily.”
Priorities
District representatives also mentioned their priorities during the debate.
In the Fifth District, roads are a priority that residents have been awaiting patiently for years, said Ms. Christopher. She went on to say that residents in the area are “very hopeful” that some of the more “dire” roads will be repaired soon.
Not that the needs of any one district should outweigh the needs of the territory as a whole, said one legislator.
“Each representative may be thinking that their projects in their districts are more important than other districts, but they’re equally important to the prosperity of the people of this territory,” said backbencher Alvera Maduro-Caines (R-D6).
“Each of us has an action plan in terms of projects. Our priorities will be striving to ensure each of these projects in progress are completed within a scheduled timeframe,” Ms. Maduro-Caines said.
View the full Standing Finance Committee report on Scribd
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