Governor: Senators' inaction likely to bring big cuts

ST. THOMAS - Gov. John deJongh Jr. said Thursday he will be sending letters to all agency heads shortly, directing them to take another major cut to their operating budgets.

That likely will mean another round of dismissals for government employees.

Since Dec. 30, deJongh has terminated about 500 government positions in an effort to close the territory's $67.5 million budget deficit for Fiscal Year 2012.

On the Senate floor Tuesday, multiple senators said the governor had 500 termination letters signed and waiting to be sent out - waiting to see what action the Senate would take.

The governor denied the accusation.

"There's no list that we're holding; it's up to the departments," deJongh said.

"Letting these employees go is the last thing I want to do," the governor said. "That's why I've borrowed."

With the recent announcement of HOVENSA's closure, $100 million more in annual revenues will be lost, deJongh said. HOVENSA's annual payments to the territory include income taxes from employees and sub-contractors, $10 million in Gross Receipts Tax and about $14 million in property taxes.

DeJongh said his administration is doing an analysis of the closure of HOVENSA's impact on the territory.

He scoffed at the resolution passed at Tuesday's session to hold an economic summit, saying that is not the solution needed right now. He said the government held a joint summit a year ago, so another summit is not necessary.

"They're avoiding taking responsibility and making any sort of decisions," he said.

The termination of the first 500 employees came after deJongh called the Senate into special session to act on his submitted proposal. The governor's proposed legislation included borrowing $90 million and increasing the Gross Receipts Tax to 5 percent to back the borrowing.

Senators voted the bill down but failed to offer an alternative in its place. Days later, deJongh said 1,000 government workers would lose their jobs by the end of January if the Senate did not take immediate action to shore up the budget.

After weeks of closed-door meetings - some with the governor, some with the Government Employees Retirement System - the senators considered two bills at Tuesday's session.

While the bills were different, they were largely based on the governor's original proposal. One bill authorized $120 million in borrowing to pay tax refunds, cover the government's outstanding balance to the V.I. Water and Power Authority, and keep the government operating through the fiscal year - preventing additional job losses. A second bill raised the Gross Receipts Tax to 5 percent.

The body passed the bill to borrow, but failed the bill to raise the taxes.

"We're in a deficit, and in a deficit there's no revenue source," deJongh said. "Any tax increase, any fee increase requires me to go to the Legislature."

Even though the end result did not give him what he needed, deJongh defended the closed-door meetings with senators. He said the meetings were helpful.

"It allowed us to have a frank and open discussion of the issues and topics," he said.

- Contact reporter Aldeth Lewin at 714-9111 or email alewin@dailynews.vi.

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