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MAPP PRESSER: Banco Popular Will Advance Territory $40 Million Tied To 2017 Property Tax Collections
FISCAL AUSTERITY MEASURES: Gov. Kenneth Mapp said today that the government will receive a Revenue Anticipation Note (RAN) in the amount of $40 million from Banco Popular to ensure the government will continue to be able to make payroll for the months of March and April.
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CHARLOTTE AMALIE – Government employees will not be laid off nor furloughed and vital government services will not be interrupted, Gov. Kenneth Mapp said in a wide-ranging speech about the territory’s financial position from Government House this morning.
The Government will also soon resume the payment of more than $20 million in tax refunds, Mapp said.
The news is based on renewed efforts to increase collections, develop new revenue sources and continue government austerity and cost-cutting measures.
“There will be no reduction in government staffing or services,” Mapp said. “Fortunately, we will not have to furlough government workers, reduce pay or close schools.”
There will be further assessment of the government’s fiscal health at the close of Fiscal Year 2017’s third quarter on June 30, he added.
Major cutbacks were on the table following the V.I. Government’s unsuccessful efforts to borrow working capital earlier this year to close a gap of more than $95 million in the Fiscal Year 2017 budget. Mapp met with Cabinet members in February and challenged them to propose how each agency’s spending could be cut by 10 percent. Once again, he urged the Legislative and Judicial branches to reduce their budgets by at least 8 percent.
Earlier this year, by executive order, the governor imposed a hiring freeze, curtailed travel and instituted other austerity measures. Mapp said the Executive Branch budget was reduced by $33 million as a result of these efforts. Plans to increase revenue include a more aggressive effort by the Office of the Lieutenant Governor to collect more than $100 million in delinquent commercial and residential property taxes. Mapp said taxes are owed on 1,953 parcels.
Those who owe back taxes are urged to set up a payment plan or risk losing their property to auction. Two property tax auctions will be held between now and the close of FY 2017 on September 30.
“It is imperative that we collect this money in order to ensure we maintain services,” he said.
Additional revenues also are anticipated through the new taxes on alcoholic beverages, cigarettes and timeshares recently approved by the 32nd Legislature. The governor is expected to sign these measures into law Wednesday afternoon.
With these efforts to cut spending, increase revenues and step up collections, the Mapp-Potter Financial Team has made the decision to balance the territory’s budget without significant borrowing. During this period, there will be an ongoing effort to “right size” and streamline the Territory’s Government, Governor Mapp said. More than $838 million was borrowed between 2009 and 2014 during the previous Administration.
The Governor also announced that the USVI will soon access $40 million via a Revenue Anticipation Note from Banco Popular. The note will be tied to 2017 property tax collections and, once finalized, will allow for the continued payment of tax refunds and other pending obligations.
Mapp said in meeting with cruise line officials at the Seatrade Cruise Global conference in Fort Lauderdale this month he learned from cruise line officials that fully 70 percent of cruise ship passengers to St. Thomas — never set foot off the ship while it is in port.
The chief executive said he was told that this is because the capital island does not have enough entertainment options for visitors.
The news conference will be rebroadcast at 7:30 p.m. and 9 p.m. Wednesday evening on Government Access Channel 6.