In presenting the proposed 2025 fiscal year budget to the Senate on Thursday, the government’s financial team, led by Jenifer O’Neal, director of the Office of Management and Budget, talked about billions of dollars. Still, the government will only be spending millions.
According to O’Neal, the Territory will have $8.7 billion in federal grants available to it, an increase of 127 percent over last year.
Office of Disaster Recovery Director Adrienne Williams-Octalien testified that the increase from $3.8 million to $8.7 million was due to recently approved FEMA projects.
Though more money will be available for the territory from the federal coffers, most will be spent from the general fund next year.
The general fund expenditure is expected to be $897 million. O’Neal said, “It is worth noting that while the $8.2 billion is available/obligated to the Territory, the fiscal 2025 budget only accounts for $443 million from other federal agencies, including the Department of Interior.”
The fiscal 2025 general fund proposed appropriation is $77 million less than last year. Sen. Angel Bolques asked whether any programs were being cut. Sen. Dwayne DeGraff wondered if the lesser budget would limit what could be offered in wage negotiations for government employees.
Members of the financial team assured the senators that their concerns were unnecessary.
O’Neal said the decrease was primarily attributable to the elimination of several one-time obligations and a reduction in the wage adjustment line item to only cover pending negotiated contracts scheduled to take effect on October 1.
O’Neal began her testimony by mentioning the unemployment rate. She said, “The U.S. Virgin Islands continued to demonstrate economic resilience by maintaining record lows in unemployment rates and a continuingly improving tourism sector. As of April 2024, the unemployment rate stands at 3.2 percent, down from 3.6 percent in FY 2023 during the same time.”
Sen. Donna Frett-Gregory said, “We should not be bragging about the unemployment rate when we actually have fewer people working.” She said the Territory has lost over 10,000 workers and she wanted to know what the administration was doing “to bring people home again.”
Frett-Gregory asked Public Finance Authority Executive Director Nathan Simmonds what was being done to stop the Territory losing out on $60 million annually from rum cover all tax that it counted on. Simmonds said Congress had been lobbied and there was no one against the higher return but Congress was too divided to get it done.
During the hearing, the Committee also passed, with a favorable recommendation, a bill to appropriate $1.4 million to begin work on dredging Charlotte Amalie harbor.
Frett-Gregory, Novelle Francis, Jr., Marvin Blyden, Bolques, Jr., Samuel Carriόn, Diane Capehart, DeGraff, Ray Fonseca, Kenneth Gittens, Javan James, Carla Joseph, and Milton Potter were present.
