25 questions about how V.I. Government handles money
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This is an Open Letter to Gov. John deJongh Jr., the members of the 30th Legislature and Office Management and Budget Director Debra Gottlieb:
I am a small business owner and tax-paying resident of the Virgin Islands. My request is simple and complex at the same time. I want to know exactly where we are, financially, as a community. I want the big picture with the small details.
I want to see an accurate accounting of our complete financial situation and a real comprehensive plan of action on how we are going to work our way out of each piece of our individual crisis, starting with:
1. How much do we really owe as a territory?
How much do we owe to everyone down to the last dollar and a recent total. I want to know how much is unpaid contribution amounts to GERS for employees wages and matching, unpaid "loans" from budget line items applied elsewhere robbing Peter to pay Paul. Example: taking money recently from the Workers Compensation fund to pay unemployment loan interest, unpaid loans for money we took in the past from GERS, unpaid WAPA bills, unpaid tax refunds, outstanding unpaid bond issues, advances from anywhere, ongoing unemployment loans from the feds, IRS fines, everything by bureaus or department if necessary to find out where the recurring financial problems are.
If we owe it, where do we owe it, how much do we owe and is it in arrears? I want to know all of it. If we had to take out a checkbook and pay it all off, how big of a balance do we need to pay our liabilities as a community?
I know the amount will be staggering but tell us the truth anyway since we have to pay for it in some manner - likely higher taxes, fees, surcharges, licenses, inspection fees, tickets, fines and other charges.
2. How much do we owe in unfunded current liabilities and future liabilities?
3. How much are we are borrowing every month, quarter and annually?
I know we owe unemployment over $70 million last count. I know we are borrowing an additional $2.5million to $5 million a month to pay current claims until all the tiers are exhausted. Last I heard, that could be by October when a bunch of unemployed neighbors have maxed out every benefit tier possible. We still have recently unemployed individuals drawing benefits who came on the unemployment rolls later in the game.
Why are we borrowing this money today? It was reported in 1999 we had a balance of over $58 million dollars, boasting the most solvent unemployment insurance fund in the nation! This fund that was set aside to pay future claims was essentially robbed blind by a few strokes of a pen to draw down the fund. It was gone when we needed it. We now have the dubious honor of having the highest Federal Unemployment Tax rates in the nation, and our rates are still climbing because of these unpaid loans.
4. What interest we are paying on all of our debts? What is the interest alone costing the territory each and every day that does not include principal reduction.
5. What is the total amount of our obligations? Include all installment payments, too. I'm sitting down, how much is it?
6. What was our total projected territory revenue from every source for 2013?
7. What was the actual territory revenue from every source for YTD 2013? How far off were the projections? How have we made changes to incorporate those changes?
8. What is the projected territory total revenue for 2014? Where is it projected to come from?
9. What is each and every other potential liability? Include those that we the public have not been told about but that department heads, agencies and others are privy to and may be negotiating on behind closed doors.
10. What and where is each and every property the government owns, what is the value of that property and why do we own it?
How much are we spending on maintaining that property annually including repairs, maintenance, insurance, etc. Bad investments and properties we are letting crumble into the ground from neglect should sold and removed from public financial support and put back on the tax rolls.
11. What bills are pending to allow more borrowing to meet current expenses?
How will interest and principal be paid for with current cash flow? If we cannot pay for current expenses today, I doubt we can afford them tomorrow either.
12. How are we are going to fund the expansion of Medicaid that is the recent "solution" to an uninsured local population?
Matching funds means we put up our money first to get theirs. Where is our money coming from and how much do we have to put in to get the initial matching money? Has anyone looked at this to see what year one, two, three and four in matching money will cost as the program grows and matures?
13. How much is the outstanding total and the projected balance over the next 12 months that must be reimbursed to the retirees who had to put their own money into GERS to get a retirement check?
What interest are these retirees earning for this loan they are forced to pay GERS in order to get their pension that they earned? When they are getting back the loan amount?
14. Why weren't theft or misappropriation of funds charges filed against those who were in charge and those who took money withheld from payrolls for GERS contributions and never remitted the money?
In the private sector, that conduct is illegal.
15. Why aren't department heads and agency heads fired and held accountable for misappropriating or redirecting money appropriated and funded?
16. Why do we tolerate shoddy or incomplete work wasting millions of dollars in our infrastructure and buildings and then reward companies or individuals involved with another contract?
Why do we excuse them from financial responsibility of fixing the problems they created and instead expect the public to absorb the enormous unbudgeted costs of repairing or replacing it?
Why don't we have a list of barred companies, owners and individuals to refer to whenever a bid is put out so they cannot fleece us again?
17. Why was it such great idea to allow the V.I. Public Finance Authority to borrow up to $45 million to make sure we have money in the Insurance Guaranty Fund?
It follows the previous idea that was approved by a previous legislature to rob this account to the tune of $40 million to fund what we could not afford to fund otherwise: the payment in 2010 of retroactive pay to government employees and retirees - which had nothing to do with failed casualty insurers the money was collected for.
Once again we had a fund with a balance set aside to pay for a specific need, but our leadership robbed it blind with the few strokes of a pen.
18. Why have we allowed money to be taken from the Workers Compensation Fund to pay the interest on the growing unemployment insurance loans we owe as a territory?
19. In addition to the employers who must pay a special surcharge of $25 per employee to help pay the unemployment loan interest, how many employees did the V.I .Government pay for? When was the government portion paid and how much was it?
20. How can the employers remaining in the territory be expected to absorb the huge annual increases in federal unemployment taxes because of the FUTA loans that are not being repaid by the territory?
The Department of Labor reports the normal cost per employee is $42 annually. Due to the outstanding loans, V.I. employers paid an estimated $147 per employee for 2012. The preliminary increase for 2013 on the DOL website reports that it will raise per-employee contributions to at least $210 each.
21. Why can a property owner wait 10 years to pay back taxes and then get a financial break or payment plan to do so while their neighbors next door pay theirs on time and pay full price?
22. How much federal money have we received for projects we have not completed or started?
23. How can GERS afford to give six months of free rent in Havensight Mall to those who cannot or will not pay?
24. What is being cut to make up for the $71 million reduction in the rum cover-over advance?
You, our leaders, need to not spend $194,521 every day for the next year to just break even with the loss. Do you grasp how big this really is?
25. Why is GERS is investing and looking to invest more in alternative investments when what has been chosen so far - such as Carambola - does not look profitable? If is not working, do not keep throwing money at it. Stop!
In a perfect world, supporting financial documentation would look like this, for we, the taxpaying public, to see:
Income minus expenses equals positive cash flow to save for coming needs. If cash flow is negative, then we have more expenses than income. Anyone else would have to cut something out. We taxpayers, business owners and your neighbors cannot just borrow some more money or raise someone else's taxes or fees - and the government should not be allowed to do so.
In a perfect world, as a territory we would have a list of debts like a credit report.
In a perfect world, we would have a list of our assets and we would be able to determine if they are appreciating and worth keeping or if they are draining our financial resources.
Indian tribal leaders are known to apply these simple tests to every resource decision:
How will this decision affect us as a community today?
How will it enrich or impoverish our grandchildren seven generations from now?
These are hard questions for any leadership body to ponder, yet they reverberate with the truth that there are consequences for actions or inaction.
- Amy Rose Herrick, St. Croix.