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Gov. John deJongh and his financial team met with the VI Senate Finance Committee this week. While the numbers are bleak, deJongh has plans to get the territory through the next two years with minimal damage.

Nathan Simmonds, deJongh’s senior policy advisor, said that the effect of the global recession was delayed slightly in the territory, hitting the Virgin Islands in the second half of Fiscal Year 2009. All sectors were then impacted, and unemployment reached 8.5%.

“Looking ahead, despite modest improvement in overall revenue collections and in certain segments of the economy, it is evident that the national recovery has not materialized as quickly as was previously anticipated. We are now faced with a much more prolonged recovery, and it appears that it will be 2013 or even 2014 before we see the economy return to pre-recession levels,” Simmonds concluded.

Overall, the government anticipates $974.2 million in gross revenue collections. Once the debt service, income tax refunds, and legally mandated transfers to various funds have been paid, the General Fund will be left with $813.9 million for FY 2011.

The FY 2011 appropriation level currently is at $845.7 million, Simmonds said. The $43.3 million for the retroactive wage payments must also be factored in, resulting in the $75.1 million projected revenue shortfall for FY 2011.

Federal and local stimulus grants are drying up, and borrowing is no longer the solution. “We are at the point where we have to make substantial reductions in costs, and we have to generate additional revenues,” Simmonds said. Read the details of how Gov. deJongh plans economic survival in the VirginIslandsDailyNews.com.