ST THOMAS, USVI -- Governor John de Jongh repeated his concerns on Thursday that the 29th Legislature, by deferring two bond authorization bills, is missing a unique opportunity to generate desperately needed economic activity in the US Virgin Islands.
“In the absence of robust private sector investment, we have a responsibility to achieve responsible and meaningful economic activity in our economy. Our actions cannot only be those that lead to cuts and austerity. The bond funds are not only intended to finish projects previously approved by this Legislature which were not adequately funded but also enables us to retrofit the biggest energy users of our government to reduce their energy costs. The additional benefit is to achieve a level of employment and tax revenues until such time as our private sector begins to make their investments,” de Jongh said.
The two bills authorize a total of $57.5 million in borrowing, generating $64.1 million in economic impact, with more than $22.3 million going directly to local construction projects and spending in related technical industries. An additional $10 million would be generated in tax revenues.
Proposed borrowing from one bill would provide financing of $20.5 million for eight capital projects across the territory, all of which have already received funding and are in various stages of construction. The money would fund additional costs associated with the Anguilla Landfill closure, athletic and educational improvements, historical landmark restoration and other reconstruction projects that will improve tourism and civic pride.
“We have no choice but to stop these projects and will be assessing how best to do so over the next couple of days,” de Jongh said today, adding, “It will delay the completion of the Kean track and not allow us to incorporate Fort Christian into our revitalization efforts, and probably increase costs when action is finally determined.”
The $35 million energy bill would finance energy efficiency upgrades at 34 schools and other educational facilities, as well as hospitals. It is structured to be self-funded, offering $676,000 in net operational savings after debt service and related costs in the first year and over $82 million in guaranteed utility expenditure savings over a 15-year period.
“With the closure of the HOVENSA petroleum refinery, and increased utility costs that we anticipate commencing next year, we viewed this as one approach to mitigating the increasing and putting a maintenance program in place,” de Jongh said.
More than 2,200 jobs were lost in the territory -- 70 percent of them on St Croix -- when HOVENSA abruptly announced in January that it was ceasing refinery operations at its facility. Those jobs represent more than $70 million in estimated lost wages and salaries. The bond-financed projects on St Croix would allocate 90 percent of their labour positions to terminated HOVENSA workers.
The construction projects associated with the two borrowing bills have the potential to create new jobs and generate more than $10 million in tax revenues, according to the Virgin Islands Bureau of Economic Research analysis.