Budget battle begins as deJongh's financial team testifies at Senate Finance Committee hearing General Fund budget proposal

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ST. THOMAS - The governor's financial team battled with senators over the same old issues at Tuesday's Senate Finance Committee hearing to review Gov. John deJongh Jr.'s new Fiscal Year 2015 budget proposal.

The governor balanced the $709.4 million General Fund budget on two cost saving proposals - changing the government's health insurance premium payments to a 60/40 split and introducing six furlough days for all government employees.

The change in the employer/employee premium split from 65/35 to 60/40 is expected to bring about $5 million to the government's coffers. The change would require legislation.

The furloughs - which the governor could implement through executive order according to Office of Management and Budget Director Debra Gottlieb - would save the government $6 million.

The budget is also balanced on $57 million in new revenues that the financial team said the Senate must come up with.

"We have to be able to afford the government that we want, and that means increasing revenues," Gottlieb said.

Senators were frustrated that they were sent an almost 700 page budget document Monday night, leaving them very little time to thoroughly review it before the budget overview hearing Tuesday.

They were also annoyed that for the second year in a row, the governor sent them an unbalanced budget.

Revenue generation

Gottlieb listed several suggestions for ways to meet the $57 million threshold including:

- A 10 percent surcharge on individual income - $27 million.

- Increasing the property tax millage rate - $18 million.

- Increasing various motor vehicle fees - $8 million.

- Decreasing the Gross Receipts Tax exemption from $9,000 to $5,000 monthly and from $225,000 to $150,000 annually.

She left the door open for senators to come up with their own ideas to generate revenues.

"We just need to come up with the right mix, the right combination," Gottlieb said.

"It's not a balanced budget because you're suggesting these things, but we don't know if it will work," Sen. Janette Millin Young said. Gottlieb said all she can do is send the Legislature a plan for expenditures based on projected revenues. It is up to senators to pass legislation to ensure the appropriations they approve are funded, she said.

"It's just one way to get to $57 million, it's not an all-inclusive list," she said.

Several senators asked whether the budget reflects the proposed reforms to the Government Employees' Retirement System.

Gottlieb said it does not, because she cannot predict what measures will or will not pass the Senate.

Millin Young said she felt like a hamster on the wheel, running in place, because after many years of trying, the Senate still cannot get real time access to the government's bank account information.

"We provide to you what we have. I can't give you what we don't have," Gottlieb said.

She pointed out that again and again, the Senate has promised to introduce revenue-generating legislation, but nothing significant has been passed.

Senators asked why the mandate to propose a two-year budget was not fulfilled. Gottlieb said the government's financial management system, the Enterprise Resource Planning System, needs to be upgraded before they would have that capability. She said that in this uncertain economy, planning that far out would require constant updates and changes.

FY 2015 budget breakdown

The total FY 2015 budget proposal is $1.1 billion. Of that, $709.4 million comes from the General Fund. The remainder of the budget includes $71.7 million from other appropriated funds, $162.2 million in federal funds, $134,5 million in non-governmental funds, and $63.2 million in other non-appropriated funds.

The $709.4 million General Fund budget includes $54.4 million for the legislative and judicial branches of government. The governor cannot propose specific budgets or spending plans for other branches of government; however, he recommends $18.2 million for the Legislature; $5.5 million for the V.I. Supreme Court; $26.9 million for the Superior Court; $100,000 for the Judicial Council; and $3.7 million for the Territorial Public Defender's Office.

The remaining amount will fund the executive branch departments and agencies, the miscellaneous budget and other operating expenses.

The $709.4 million FY 2015 General Fund budget breaks down into budget categories as follows: $342.9 million for salaries and benefits; $12 million for supplies; $185.7 million in other services and charges; $24 million in utilities; $2.4 million in capital outlays; $153.5 million in miscellaneous expenses.

- Contact reporter Aldeth Lewin at 714-9111 or email alewin@dailynews.vi.Department FY 2014 appropriated FY 2015 proposed

Adjutant General $1,396,793 $1,334,478

Agriculture $2,483,657 $2,450,613

Board of Education $1,827,956 $1,742,975

Bureau of Information Technology $2,311,731 $2,240,420

Bureau of Internal Revenue $9,661,663 $11,060,069

Bureau of Motor Vehicles $1,565,952 $1,447,005

Corrections $27,223,068 $28,304,986

Education $162,206,569 $159,505,857

Finance $4,859,698 $5,289,653

Fire Service $17,049,985 $16,357,086

Governor's office $15,009,581 $9,008,731

Health $21,015,653 $20,034,274

Human Services $62,417,928 $62,337,806

Inspector General $1,466,164 $1,368,057

Justice $13,295,652 $12,654,323

Labor $4,386,332 $4,184,143

Legislative and Judicial Branches* $56,706,316 $54,438,062

LEPC $617,037 $587,083

Licensing and Consumer Affairs $2,831,514 $2,975,681

Lt. Governor's Office $6,705,528 $6,730,720

Luis Hospital $19,253,114 $20,148,874

Miscellaneous $165,458,897 $114,413,372

Office of Management and Budget $2,152,187 $2,047,907

Office of Veterans Affairs $333,727 $309,787

Personnel Division $2,622,673 $2,503,164

Planning and Natural Resources $7,351,671 $6,848,313

Property and Procurement $3,470,969 $3,463,678

Police $57,313,507 $57,586,063

Public Works $18,779,029 $19,295,077

Schneider Hospital $21,323,994 $22,472,518

Sports, Parks and Recreation $6,018,964 $5,693,166

STT-STJ District Board of Elections $81,902 $78,866

STX District Board of Elections $75,318 $78,866

Tourism $2,608,997 $2,611,046

V.I. Energy Office $1,414,866 $1,258,837

V.I. Elections System $1,237,056 $1,242,268

VITEMA $4,406,138 $4,591,421

Waste Management Authority $23,240,023 $22,310,423

University of the Virgin Islands $30,055,156 $29,554,053

Total General Fund appropriations $776,218,001 $720,478,274

Cost saving initiatives** ($14,274,193) ($11,000,000)

Net General Fund appropriations $761,943,808 $709,478,274

* The governor cannot propose specific budgets or spending plans for other branches of government.

* Cost saving measures proposed by the governor include changing the government's health insurance plan to a 60/40 split and including six furlough days for government employees in FY 2015.

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