As the Governor prepares to deliver his State of the Territory Address, the people of the Virgin Islands deserve more than optimism, selective framing, or recycled talking points. They deserve the truth.
And the truth is this. The Government of the Virgin Islands is in a deeply precarious financial position, one that can no longer be obscured by messaging or managed away with hopeful projections. The numbers already tell the story, and they tell it plainly.
For years, the government’s finances have revolved around two primary accounts. Understanding the distinction between them is essential, because confusion, intentional or not, has helped mask the severity of the problem.
Bank One is the government’s operating account. It is the checkbook. This is where payroll and vendor payments are made, utilities are covered, and routine government expenses are handled. It is funded by recurring revenues such as taxes, fees, and collections. When officials say cash is tight, what they really mean is that Bank One is stressed or depleted.
Bank Two is not an operating account and was never intended to function as one. It is a clearing and holding account for restricted and pass through funds. This includes the Tourism Advertising Revolving Fund, which is largely funded by hotel room taxes and legally designated for tourism marketing, not general government spending. Bank Two also temporarily holds taxes and fees collected for agencies, fines and penalties, permits, refunds, and internal transfers awaiting reconciliation.
Here is the reality leadership has avoided stating clearly.
Bank One is empty.
Bank Two is empty.
Not low. Not strained. Empty.
This is not conjecture. The Department of Finance’s monthly revenue reports, publicly posted, show ongoing stress in operating cash balances and recurring revenues that consistently underperform projections. The Internal Revenue Bureau’s reports reinforce the same conclusion. Month after month, the data shows declining balances, weak collections, and no meaningful cushion left to absorb fiscal shocks.
These are government documents telling a glaring story.
With the unprecedented level of federal relief funds received by the territory in recent years, the Virgin Islands should not be in this position. There is no defensible explanation for being this financially depleted after historic federal support. None.
Yet instead of addressing the structural failures early, the government leaned on temporary money. Restricted funds were treated like flexible cash. Bank Two became a crutch rather than a clearing account. Now, there is nothing left to lean on.
Quiet signals suggest that borrowing may once again be floated as a solution. Bonds. Financing. Short term fixes. This playbook should look familiar. Borrowing to plug holes created by mismanagement is not a strategy. It is a warning sign that the fundamentals have collapsed.
Then there is the Epstein money.
Those funds were spent. They were never properly reported as spent. To this day, there is no comprehensive public accounting, no transparent breakdown, and no clear explanation to the people of this territory about where that money went. That alone should alarm everyone, regardless of political affiliation.
This is not a personal attack.
This is not partisan.
This is math.
This is governance.
The financial crisis facing the Virgin Islands did not happen overnight. It was created over time through poor fiscal discipline, weak internal controls, and a persistent refusal to confront reality early enough to correct course.
A State of the Territory Address that does not grapple honestly with this financial condition is not leadership. It is avoidance. The people deserve candor. They deserve to hear where things went wrong, what guardrails failed, and what will be done differently moving forward. They deserve transparency, not reassurance.
Markets do not respond to optimism. Creditors do not operate on vibes. Federal partners do not rely on talking points. They look at balance sheets.
At some point, the Governor must reckon with the truth. The numbers already have.
The Government of the Virgin Islands is broke.
Literally.
And the people of this territory did not deserve that.
Editor’s Note: Opinion articles do not represent the views of the Virgin Islands Source newsroom and are the sole expressed opinion of the writer. Submissions can be made to visource@gmail.com.
Related Link:
Op-Ed: The State of the Territory Is an Institutional Memory Crisis
