At Monday’s press conference, Gov. Albert Bryan Jr. defended his request to extend the government’s line of credit to $150 million or secure a new $50 million credit line, responding directly to criticism from Sen. Kenneth Gittens, who has called for more transparency and questioned the government’s financial management before approving further borrowing.
Gittens, among other senators, has raised alarm over the government’s handling of $50 million previously allocated for retroactive wage payments, of which he said only $2.5 million has been disbursed. In a recent press release, Gittens also questioned why, despite federal hurricane recovery dollars and Epstein estate settlements, infrastructure issues remain and WAPA continues to struggle with fuel costs. “WAPA can’t even afford diesel to keep the lights on,” Gittens wrote last week, emphasizing that taxpayer dollars must be carefully accounted for before more borrowing is considered.
Taking aim at Gittens’ remarks Monday, Bryan emphasized that the government’s revenues are generated through taxes, liens, and other means, not directly handed over by the Legislature. “The Legislature doesn’t fund the Government of the Virgin Islands,” Bryan said. “They authorize how we spend the money, but it’s misleading to suggest they provide us with funds directly.”
Addressing the claims about retroactive wage payments, Bryan clarified that the $50 million Gittens referenced was an authorization, not a lump sum sitting in the government’s accounts. “What they did was sign an authorization saying that if we have $50 million, that’s where it should go. It doesn’t mean the money was already there to use,” Bryan said.
Bryan highlighted his administration’s progress in reducing the territory’s debt, which he said is now half a billion dollars lower than when he took office in 2019. “That is real fiscal progress,” he stressed, calling the current request for a line of credit a tool for managing cash flow, not an expansion of the debt burden. “We’re not borrowing recklessly. We’re borrowing to ensure we can meet our obligations.”
The governor explained that lines of credit are essential for the government to maintain liquidity, especially during periods when revenues are delayed. He cited the recent extension of the corporate income tax filing deadline by the federal government from October 2024 to February 2025 as an example. “This delay will significantly impact our revenue collections and, ultimately, our cash flow and ability to meet urgent obligations,” Bryan said. The shift means $80 million in expected revenue will now arrive later, putting pressure on the government to find alternative ways to maintain operations.
Bryan also noted that his administration has made significant progress in paying out retroactive wages that had been neglected for over 30 years, disbursing $43 million since 2022. “We’re one of only two administrations to make real headway on these long-standing obligations,” he said.
Regarding Gittens’ broader concerns about WAPA and infrastructure, Bryan acknowledged that challenges remain but stressed that the government is working hard to manage competing priorities, including inflation, global conflicts, and supply chain issues that have impacted resources.
A Line of Credit for Cash Flow and Stability
Monday, the governor explained that the line of credit is crucial for ensuring the government can operate smoothly and pay for essential services, such as Medicaid matches, vendor contracts, and, among other things, payments for Pafford Medical Services, which recently pulled out of the territory, citing approximately $10 million in unpaid debt.
“No government of this size can operate efficiently without a line of credit to bridge the gap between revenue collections and down periods,” Bryan said. Without it, he warned that the government could face a $60 million shortfall by the end of the fiscal year, once the income tax refunds are paid. The deficit currently stands at about $90 million.
If no line of credit is approved, the government will make significant cuts and “suck salt,” Bryan said, adding in response to questions from the Source afterward that while a “pretty conservative” fiscal year 2025 spending plan has been submitted to the Legislature, departments and agencies could face a 10 percent budget cut.
In response to questions about available funding sources that could cushion the blow, Bryan also cited $80 million remaining in federal American Rescue Plan Act (ARPA) funds. However, he expressed reluctance to use those funds for current financial shortfalls, emphasizing the importance of preserving them for long-term projects. “I don’t want to use that,” Bryan told the Source. “I’d rather complete the projects we’ve planned—sewer and stormwater systems, freshwater expansion, and agriculture. These are things that may never be funded again if we don’t act now.”
Bryan also noted that while the flexibility of ARPA funds allows for debt repayment, he prefers borrowing short-term to maintain progress on these initiatives, adding that he had previously asked the Legislature for approval to address financial needs in December, but no action was taken.
Bryan said he still remains focused on investing in the territory’s future, outlining during Monday’s presser new initiatives designed to boost the local economy, including a proposal that would allow cruise ships docked at St. Croix to operate onboard casinos, making the island a more attractive destination for the cruise industry. “This is about making St. Croix a place where people want to stay longer and spend more,” he said, adding that keeping passengers on the island instead of on the ships could significantly increase tourism revenue.
Additionally, Bryan announced a $250,000 grant initiative aimed at revitalizing downtown areas across the territory, with funds allocated to organizations like the St. Thomas Chamber of Commerce, Our Town Frederiksted, and the Christiansted Retail and Restaurant Association. “We want to see these towns thriving with new activities and events that draw people in,” Bryan said, pointing to long-standing traditions like Miracle on Main Street and Jump Up, which help stimulate economic activity.
Economic Stimulus Amid Financial Strain
When asked about spending during a financial crunch, Bryan emphasized that much of the funding for local projects, including downtown development and the upcoming 25th-anniversary rollout planned for the Taste of St. Croix, comes from federal grants designed to promote tourism. “This is about using dedicated money for its intended purpose,” Bryan explained, adding that cutting back on spending would be disastrous for the territory’s economy. “If the government stops spending, the economy goes into freefall.”
Bryan also stressed that his administration is committed to paying out $27 million in income tax refunds over the next 30 days, easing the financial strain many residents face. “We have to make sacrifices, but we are working to help the people who pay their taxes in earnest,” he said.
But, balancing spending also comes with maintaining liquidity, he added.
“It’s like managing a household—most people use a mix of savings and credit to get by, and the government has to do the same,” he said. Bryan said that the government currently owes $54 million to vendors, $14 million of which is due to late-filed invoices. He acknowledged that internal inefficiencies have contributed to this.
“That’s my management of my employees, my fault, and I’m going to take care of that,” the governor said Monday, adding that the administration is taking steps to address it, including implementing GVI Buys software, which will allow vendors to upload and track invoices directly; getting contracts processed faster so the government isn’t incurring costs without a purchase order in place; and streamlining emergency payments to ensure that paperwork is processed efficiently.
