ST THOMAS, USVI -- Senator Janette Millin Young has cautioned leaders in the US Virgin Islands to pay close attention to the economic woes that Puerto Rico is now experiencing in order to avoid a similar fate in the USVI.
Last week, Puerto Rico’s debt rating was downgraded to junk status by Standard and Poor’s and Moody’s Investor Services, an issue that can negatively impact the commonwealth territory’s ability to access the bond market.
Puerto Rico has been forced to implement harsh measures to avoid financial collapse such as slashing the government payroll by laying off tens of thousands of employees and raising taxes that the population can ill-afford.
In a press conference Gov. Alejandro Garcia Padilla held Monday, the governor said he would submit a balanced budget to the Senate for the upcoming fiscal year and is working with the legislature to cut an additional $170 million from the current budget, while committing to not lay off government employees.
Senator Janette Millin Young
“Also speaking to the press on Puerto Rico’s economic challenges, House of Representatives President Jaime Perello said Puerto Rico legislators are already working on economic development measures and noted that government agencies are ineffective at tax collection,” Millin Young said.
Millin Young is the chair of the USVI Senate’s Economic Development, Agriculture and Planning Committee.
She added, “Curiously, while we are fortunate to have a fair credit rating, we are also working on refreshing our economic development laws and incentives, and senators in the Virgin Islands have also pointed to weaknesses in our local tax collections.”
“It is important to note the Virgin Islands’ elected leadership was already working on economic development measures to attract new investments and for the sustainment of existing businesses,” Millin Young said. “Just last week, we vetted several measures in my committee such as making changes to the Economic Development Authority lending programs, adding more tax incentives to the program, and merging divisions within the authority to make the agency more responsive to the needs of new and existing businesses.”
Millin Young said that while Bill No. 30-0302 to rename the Government Development Bank to the Economic Development Bank and merging several divisions to improve the efficiency of EDA passed, the bill is expected to be amended further with technical amendments at the next Rules and Judiciary Committee meeting.
She urged the business community and prospective entrepreneurs to either call her office or go online to legvi.org and read through the bills to suggest changes to be considered at the next Economic Development, Agriculture and Planning Committee meeting. Bill No. 30-0300 to make changes to the economic development commission program was held in committee last week as senators will consider suggested changes that the Chambers of Commerce, business owners and attorneys who attended the meeting offered.
Millin Young reiterated that she has continuously advocated for the VI Internal Revenue Bureau to step up its collection of outstanding taxes which IRB officials have said is more than $245 million. While the senator said that a good portion of that may be uncollectable, she is reassured the administration will follow through on beefing up its collections efforts as stated by Governor John deJongh at his last State of the Territory Address in January.
At the time, the governor said that his administration is working “toward balancing our revenues and spending, a further opportunity to help do so lies in the hands of the Tax Collection Taskforce” he created. During that speech, the governor said that over the years, his administration has come to better understand the magnitude of the potential revenues that would flow into the General Fund if everyone across our community paid all the taxes that they owe each year.
“In effect, our territory’s economy can stay afloat and prosper if we all do our part to grow and sustain it,” Millin Young said.