Panel Tables Bill to Strip Some Powers from OMB Director

OMB Director nominee Jenifer O’Neal testifies at the Senate Finance Committee hearing Tuesday. (Photo by Barry Leerdam for the V.I. Legislature)
OMB Director nominee Jenifer O’Neal testifies at the Senate Finance Committee hearing Tuesday. (Photo by Barry Leerdam for the V.I. Legislature)

Lawmakers on Tuesday tabled legislation that would have removed certain authorities from the director of the Office of Management and Budget, a bill meant to promote transparency and accountability in the budget process, according to bill sponsor Sen. Alicia Barnes (D-STX).

Bill No. 33-0021, which would remove the authority of the OMB director to change or withhold planned expenditures, came under review during the Senate Finance Committee hearing Tuesday at the Earle. B. Ottley Legislative Building on St. Thomas.

Current law allows the OMB director to make changes at any time during the appropriation period if the amounts appropriated are greater than what an agency or program needs. The OMB director currently also has the ability to make such changes if available funds are insufficient to meet the authorized expenditures.

“What has resulted is that the OMB director has become an unelected super-legislator, exercising veto authority over the duly deliberated and passed appropriations, passed by the Legislature of the Virgin Islands,” Barnes said. “Often these unilateral adjustments run contrary to legislative intent, especially of the proponent of the appropriation.”

OMB Director Nominee Jenifer O’Neal testified against the bill on Tuesday, saying a budget director’s authority to withhold or reduce allotments mirrors federal law and spending processes, and is not unique to the Virgin Islands. O’Neal said it is also a practice of almost all states, through their own budget offices, and the federal government’s Office of Management and Budget.

O’Neal also pointed out that the modifications are mainly reductions based on funding availability, and any government agency may not spend more than the amount appropriated to it, a power that lies exclusively in the Legislature, she said.

“Reductions are only made based on the availability of funds,” O’Neal stressed. “I would prefer, as OMB director, and I think any OMB director would prefer, not to have to reduce any department or agency because we are aware of all of the work that the departments and agencies have to do.”

O’Neal also pointed out a potential flaw in the proposed legislation. While the bill seeks to remove the OMB director’s ability to modify or withhold budget amounts, she said it does not clarify who will assume the responsibility of managing the expenditures and maintaining separation of powers at the same time. O’Neil reminded lawmakers that the OMB also monitors the budget, tries to balance it, and performs other analysis functions, including controls on hiring, analyzing legislation and managing the territory’s debt.

Voting to hold the bill in committee pending further amendments were Sens. Oakland Benta (D-STX), Marvin Blyden (D-STT), Javan James (D-STX), Athneil “Bobby” Thomas (D-STT) and Finance Committee Chairperson Sen. Donna Frett Gregory (D-STT). Sen. Kurt Vialet (D-STX) voted no. Sen. Allison Degazon (D-STX) was absent.

Tax Study Tabled
Lawmakers also held in committee Bill No. 33-0033, which seeks to roll out another Virgin Islands Tax Study Commission. The commission would review current laws and the territory’s tax structure, with the data used toward tax reform efforts aimed at maximizing revenues.

St. Thomas tax attorney Erika Kellerhals testifies on the Tax Commission bill Tuesday. (Photo by Barry Leerdam for the V.I. Legislature)
St. Thomas tax attorney Erika Kellerhals testifies on the Tax Commission bill Tuesday. (Photo by Barry Leerdam for the V.I. Legislature)

Erika Kellerhals, an attorney representing the St. Thomas-St. John Chamber of Commerce, supports the initiative, but raised several concerns, including insufficient time for the commission to undertake a comprehensive review.

Kellerhals also recommended creating a taxpayer registry, tied into the Department of Licensing and Consumer Affairs and the Division of Corporations and Trademarks under the Office of the Lieutenant Governor. This would notify the VIBIR each time a company registers to do business in the territory, which ultimately helps tax collection efforts.

Kellerhals urged lawmakers to create provisions in the bill that would prioritize tax collection efforts, and to move toward an online tax-filing system for the territory.

Bureau of Internal Revenue Director Nominee Joel Lee said his agency supports the bill, but he would rather have the bureau in an advisory role than become a voting member of the commission, as the bill specifies.

Voting to hold the bill in committee were Benta, Blyden, James, Thomas, Vialet, and Frett Gregory. Degazon was absent.

Lease Agreement
Lawmakers also approved a lease agreement between the V.I. government and Victor’s New Hideout, LLC, on St. Thomas. The lease for Parcel No. 179 in Subbase, No. 6 Southside Quarter involves a 20-year lease of a 6,700-square-foot space.

The Department of Property and Procurement agreed on a lease amount of $52,056 per year, with an investment commitment of $500,000 from business owner Victor Sydney for reconstruction and improvements.

Senators raised concerns about the potential to utilize the space for a nightclub operation, urging Sydney to apply for a use variance.

Voting to approve the lease agreement were Blyden, Benta, DeGazon, James, Thomas, Vialet, and Frett Gregory. The lease agreement will go under review by the full Senate body in the next Senate session.