Senate president: 8 percent pay cuts will expire in July as law mandates
Published: March 13, 2013
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ST. THOMAS - As the territory faces a $26.3 million budget shortfall, a federal funding cut from the sequester and the government makes plans to implement a 5 percent cut across all departments and agencies, government employees are worried about the ending of the 8 percent pay cuts.
Senate President Shawn-Michael Malone says they have nothing to fear.
"As far as we're concerned, the salaries will be restored," Malone said.
The pay cuts were the Senate's answer to Gov. John deJongh Jr.'s announcement two years ago that he would have to dismiss more than 1,400 employees in Fiscal Year 2011 and 2012 in order to close the budget deficit.
In 2011, the Senate passed and the governor signed the Economic Stability Act, which included the 8 percent pay cut and other measures designed to cut costs and increase revenues.
The pay cuts took effect July 28, 2011.
However, the legislation included a sunset clause. According to the law, the 8 percent pay cuts are to be fully restored by July 3 of this year.
"The administration will comply with whatever is the law," Office of Management and Budget Director Debra Gottlieb said. "Right now, the law requires that it be restored in July and we have budgeted it in the miscellaneous section of the budget, approximately $7 million."
Malone said senators believe that restoring the 8 percent pay cuts will actually boost government revenues, taxes and circulate more money in the economy.
"So, restoring the 8 percent makes sense from an economic standpoint," he said.
The governor has not approached the Senate with any plans to postpone or repeal the restoration and no senator has put in a drafting request to do so either, Malone said.
"He's looking at other things, but that's not one of them," Malone said about the governor.
"As far as a comment on the 8 percent issue," Government House spokesman Jean Greaux Jr. said, "there are a lot of people saying a lot of different things on the topic of the 8 percent salary reductions but at this point in time there is nothing happening so there really is nothing to discuss."
Malone said he understands people's concern when they hear that the department and agencies will be taking a further 5 percent budget cut.
"The government's request to cut the budget by 5 percent was not regarding salaries, that's operational cuts," Malone said.
At the University of the Virgin Islands, however, budget cuts may prevent the restoration of the 8 percent in July.
University of the Virgin Islands President David Hall refused to discuss the 8 percent cuts until he meets with the governor.
However, at a UVI board meeting Saturday, he implied that university staff who took the 8 percent cuts in 2011 may not have their full pay restored when the sunset clause takes effect.
He told board members that restoring the pay cuts for the coming fiscal year would have taken a budget increase of $1.7 million, however, instead of more money, the university is getting $1.4 million less.
He has written to deJongh and hopes to meet with him soon to discuss the university's budget woes, he said.
- Contact reporter Aldeth Lewin at 714-9111 or email alewin@dailynews.vi.
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