Gov. John deJongh Jr. gave his fourth State of the Territory Address on Monday and was cautiously optimistic about the economy of the VI.
While he acknowledged that tourism will always be a main driver in the V.I. economy, he said he has broadened the territory’s economic base – adding stability and opportunities for growth through private-public partnerships.
Still, the territory is facing big economic challenges. DeJongh said the government is running a monthly deficit of $25 million and tax revenues fell by 30 percent last year – resulting in about $234 million less than collected the year before.
“To put this in perspective, $234 million is almost half of the cost of salaries and benefits of our government workers for a full year,” deJongh said.
He has structured several initiatives which will help the economy recover, such as the Captain Morgan rum distillery, the expansion of the Cruzan rum distillery which will provide stable income streams.
The territory is leaning heavily on federal stimulus money available through the American Recovery and Reinvestment Act, and its own $86 million bond issue for local capital projects. The territory has applied for about $400 million in federal stimulus dollars, and received $157 million to date. Also, the government borrowed $250 million to shore up budget shortfalls and, “bridge this difficult period,” deJongh said.
For the real estate sector, the governor failed to detail any plans for the future collection of property taxes or update the public on the legal morass that is preventing the taxes from being collected. He also did not explain how the territory will navigate a potential budget shortfall of more than $167 million if property taxes are not collected in 2010.
HUD officials have agreed to a timeline of 18 months to return control of the territory’s public housing communities to the Virgin Islands. Financial mismanagement caused the federal government to take over the public housing system in August 2003.
Read more about his comments on the environment, education, accountability, and crime at VirginIslandsDailyNews.