Got TIPS or BREAKING NEWS? Please call 1-284-442-8000 direct/can also WhatsApp same number or Email ALL news to:newsvino@outlook.com;                               ads call 1-284-440-6666

USVI Gov’t has 2 days cash on hand left, Finance Com. reveals

February 16th, 2017 | Tags: Kenneth E. Mapp sin tax bill Valdamier Collens plan
The US Virgin Islands (USVI) Government has two days cash in hand, says Department of Finance Commissioner and Public Finance Authority Executive Director, Valdamier Collens, speaking during a Committee on Finance hearing on Wednesday February 15, 2017 where lawmakers and testifiers deliberated Governor Kenneth E. Mapp’s sin tax bill. Photo: Internet Source
VI CONSORTIUM

CHARLOTTE AMALIE, St Thomas, USVI- “I always communicate to you that the number of days of cash changes on a day to day basis. But when it’s down to two days, I think that the answer to your question is rather obvious.”

Those were the words of US Virgin Islands (USVI) Department of Finance Commissioner and Public Finance Authority Executive Director, Valdamier Collens, speaking during a Committee on Finance hearing on Wednesday February 15, 2017 where lawmakers and testifiers deliberated Governor Kenneth E. Mapp’s sin tax bill, which aims to either introduce or increase taxes on rum, beer, tobacco products and sugary drinks, as well as internet purchases and timeshare unit owners.

Mr Collens said the standard for any government should be three to six months reserved cash. “We haven’t met the standard since I came into the position,” he made known, adding that when he took the Finance commissioner position, the territory only had 15 to 16 days cash on hand.

The alarming revelation jolted lawmakers, who then sought to calm the territory by getting assurance from Mr Collens that government employees would be paid today. They would, Mr Collens said, but the upcoming weeks were uncertain, he suggested, stating that the plan is to make sure that government employees are adequately notified if their pay were to be delayed.

He said while the government’s cash on hand situation changes frequently — “You can ask us on April 15 of every year and we might say 30, 40 or 50 days cash on hand” — he explained. Mr Collens also warned: “It is important for the community to understand that, the fact that we’re in the ones or the teens, is not good for a government of this size. We need to, as far as executing this plan, look for ways to get us within the area of between 90 days cash-on-hand and 180 days cash-on-hand on a consistent basis.”

The revelation follows multiple developments in recent days, including two executive orders from Governor Mapp that aims to right the territory’s fiscal crisis; one gives Mr Collens vast power over government finances, while the other puts a freeze on all non-essential hiring, non-essential travel, and non-essential use of government vehicles.

‘We have a plan’

Asked by Senator Novelle A. Francis if there was anything that he could say to reassure the community, Mr Collens pointed back to the administration’s sin tax measure.

“What I would say is, in comparison to our neighbor [Puerto Rico], we have a plan and we didn’t need a control board to come in and write the plan,” Mr Collens said. “It is not the best plan, and it is a plan as we have indicated, a flexible plan that will be revised and updated from time to time.”

Yesterday’s hearing came against the backdrop of a sizable protest near the Legislature in St. Thomas, where business owners and private citizens joined forces in denouncing the sin taxes. In unison, the crowd, many of them business owners, shouted, “No more taxes!” They held up multiple signs with all sorts of writings, including, “legalize it,” referring to the legalization of marijuana in the territory, “Bring in summer cruise traffic,” relative to more cruise ships during summer months in St Thomas, the territory’s main tourism hub. And another that read, “No wasteful spending, no borrowing and no new taxes.”

The ongoing events are a culmination of a government that has maxed out its borrowing capacity by yearly going to the bond market to satisfy its structural deficit, while refusing to make the necessary changes that would bolster the market’s confidence in the government’s continued ability to meet is financial obligations. And with a 2017 budget deficit of $110 million that will not be satisfied, difficult choices must be made by the Mapp administration.

“It’s not even an assumption anymore, we have to act in a way in which we don’t have access until we demonstrate to ourselves — not to the bond market — that we want to fix our structural deficit. So for starters we know $110 million is out of the budget, and so we have to act accordingly to adjust and revise our budget,” Mr Collens told The Consortium in a wide-ranging interview about two weeks ago.

Mr Collens said the territory would not even attempt to access the market anytime soon, whether or not the 32nd Legislature passed the governor’s proposed five-year economic recovery sin tax measure. And even if the measure were to become law, both the bond market and the government would wait up to a full year or more before restarting negotiations. The commissioner’s words were a blunt and sobering acknowledgement that the financial collapse was no longer going to happen, but is now in play.

This means, Mr Collens acknowledged, the furloughing of government employees, cutting back on government services, deep cuts in the budgets of all government departments and agencies, assessing positions within the government and searching for areas where excess and positions could be eliminated.

“We have to show investors that we are willing to look at new revenue enhancement measures, as well as [moderating] our expenditures.  The thing is we have to realign and right-fit our budgets to ensure that this misalignment doesn’t occur — because if you don’t have access, well then you have to fix your budget,” Mr Collens said.

“If we are able to pass measures that investors will view as we are addressing our structural deficit, that would bode well to the investors, but they’re not going to jump out tomorrow and say, ‘Oh, come back to the market.’ They’re not going to do that,” he added.

12 Responses to “USVI Gov’t has 2 days cash on hand left, Finance Com. reveals”

  • oh boy! (16/02/2017, 14:15) Like (15) Dislike (0) Reply
    Would be good to know the state of the bvi finances
    • premier (16/02/2017, 21:44) Like (0) Dislike (0) Reply
      you mean you that dumb, that you dont know the state of the bvi finances?.
    • the rock (17/02/2017, 05:26) Like (0) Dislike (2) Reply
      See guys, even our neighbor's next door going through the same hell ride as us, and we over here chatting piss about increments etc. before we be happy to just have a job, we also need more cruise ships to come during the summer time Hon Mark Vanterpool, one a week after the end of April to the beginning of October is devastating to our taxi drivers also, by the way the usvi government is taking page out of our virgin islands dovernment books, we should be proud of that, talking about introducing the sin tax which is so badly needed and also legalizing marijuana to up our finances!
  • Reality check (16/02/2017, 14:17) Like (5) Dislike (0) Reply
    this is serious
  • Heckler (16/02/2017, 14:25) Like (4) Dislike (0) Reply
    Don't tell me that Mapp done try the treasury?
  • insurance adjuster (16/02/2017, 15:21) Like (5) Dislike (0) Reply
    drug habits and bribes are expensive.
  • Grinch (16/02/2017, 17:40) Like (6) Dislike (0) Reply
    Atleast the USVI public knows what the finance is unlike NDP who is playing politics with the tax payers money. Time will tell
    • M & M (16/02/2017, 18:41) Like (5) Dislike (0) Reply
      trust me we know it's dry and the two thief them gone with it
    • HelpHelp!! (17/02/2017, 11:37) Like (1) Dislike (4) Reply
      Allyo really care about finances? What you care about it for? You getting your salary from Government, right, or you just want to see confusion in our country? Start to pray for the good of the Virgin Islands and stop harping on you want to know about finances, for what? You responsible for the Govt. bills? Set of people just want to see trouble for a country that has worked hard with picks and shovels to reach where they are today. Help us, lord, from those among us who are not with us. You, Grinch is one.
  • Wendy (16/02/2017, 23:25) Like (2) Dislike (1) Reply
    The race to the bottom continues.
  • My girl (19/02/2017, 14:16) Like (0) Dislike (0) Reply
    What a way to rob taxpayers money ???


Create a comment


Create a comment

Disclaimer: Virgin Islands News Online (VINO) welcomes your thoughts, feedback, views, bloggs and opinions. However, by posting a blogg you are agreeing to post comments or bloggs that are relevant to the topic, and that are not defamatory, liable, obscene, racist, abusive, sexist, anti-Semitic, threatening, hateful or an invasion of privacy. Violators may be excluded permanently from making contributions. Please view our declaimer above this article. We thank you in advance for complying with VINO's policy.

Follow Us On

Disclaimer: All comments posted on Virgin Islands News Online (VINO) are the sole views and opinions of the commentators and or bloggers and do not in anyway represent the views and opinions of the Board of Directors, Management and Staff of Virgin Islands News Online and its parent company.