CHARLOTTE AMALIE — As the second half of February begins, Gov. Kenneth Mapp has announced a series of austerity measures to help his administration cope with a pending fiscal crisis. The chief executive issued a proclamation Tuesday freezing government job vacancies, except in key areas.
The proclamation also restricts travel by government personnel and limits the use of government vehicles assigned to agency directors and commissioners. Mapp is also suspending negotiated wage increases, including those ordered by the U.S. Appeals Court, 3rd Circuit which called for restoration of an eight percent wage cut ordered by former Gov. John de Jongh.
The governor said the steps were needed because there was not enough cashflow to meet current obligations. “Governor Mapp’s order cites the need for ‘immediate and comprehensive action to reduce current spending,’ while ensuring, to the extent possible, that essential services to protect public health, safety and welfare are preserved,” said Government House Communications Director Cherie Munchez.
Exempt from the hiring freeze are public workers whose positions are paid through federal funds, human service workers, teachers, and those working in agencies under federal consent decrees like police and corrections officers.
During his State of the Territory Address delivered to members of the 32nd Legislature on Jan. 30, Mapp called for the passage of revenue enhancers. If no new money came in by the latter part of February, he said, the government could not meet its financial obligations.
The Feb. 14 executive order will remain in effect until further notice, Munchez said. “The Order takes effect immediately and will terminate when a subsequent written Executive Order is issued by the Governor of the Virgin Islands of the United States,” the spokeswoman said.
Since then Mapp has held talks with cabinet officials and agency heads, directing them to produce plans to cut their operating budgets by 10 percent each. After talks held over the weekend, Munchez issued a statement saying those agency heads were asked to follow up in the coming week by delivering those plans to Government House.
The administration’s proposed revenue enhancers have been dubbed a sin tax on alcohol, tobacco and sugared beverages and sales conducted by way of Internet. The package also includes limits on reductions for property tax bills and taxes on vacation time shares.
Some lawmakers and business owners have complained the measures are too punitive. That sentiment was heard recently at a town meeting hosted by Senator-At-Large Brian Smith.
Mapp, on Tuesday, appealed to the business community for some understanding and greater cooperation.
“This government is wrestling with a structural imbalance that we inherited. To be fair, the previous administration had challenges from the abrupt departure of Hovensa and the crippling worldwide economic recession and borrowed more than $800 million to close the gap,” Mapp said.
But without greater cash flow, the Virgin Islands’ most vulnerable citizens, including children and seniors, will find their basic services curtailed, he said. And after meeting with representatives from the Chambers of Commerce on St. Croix and St. Thomas-St. John, Mapp said some of their suggested cutbacks were harsher than what he was proposing.
“For example, the chambers are asking that we slash the salaries of all government workers by 30 percent, that we increase property taxes on residential and commercial property and that we impose an income tax surcharge on the salaries of all workers in the Territory,” he said. “These draconian recommendations of the Chambers of Commerce to avoid the imposition of a 25 cents tax on a bottle of beer or a 50 cents tax on a bottle of rum. It’s now time to put our people — the people of the Virgin Islands first.”