The Senate Committee on Budget, Finance, and Appropriations approved the fiscal year 2025 budget on Wednesday, following months of rigorous adjustments necessitated by a more than $60 million shortfall for FY 2024 revealed during final budget wrap-up hearings. The shortfall, a stark reminder of the territory’s ongoing fiscal crunch, prompted the governor’s financial team to propose a more conservative budget for the upcoming fiscal year, officials have said.
“This budget period was an interesting one, particularly with the aggressive revenue projections we received from the executive branch,” said Sen. Donna Frett-Gregory, the committee chair, who has been at the helm of the budget process since June. “Upon closer inspection, these projections did not align with historical trends or our current economic conditions, necessitating extensive refinement.”
One of the key areas of focus for the Senate was restoring funding to critical programs that had been reduced in the governor’s proposed budget. “The proposed budget cut some very important programs vital to our youth and our elderly population,” Frett-Gregory explained. “We felt it was our responsibility to protect these groups, so we restored funding for youth programs like About Face, under the National Guard, and critical services for the elderly, such as Meals on Wheels.”
Frett-Gregory highlighted that the Meals on Wheels program, which has struggled to operate effectively, required specific support to continue serving the elderly population. “In our deep dive discussions, we learned that receiving federal dollars for this program hinges on the need for two additional vehicles and two employees. We made sure to include these line items in the budget to ensure this essential service continues,” she said.
The Senate also addressed the territory’s revenue needs by advancing a measure to increase the vehicle rental surcharge from $3.75 to $5. An additional $1.25 per rental will be allocated to the General Fund if Bill 35-0272 becomes law. “This bill is a smart, strategic step forward for our territory,” stated Sen. Angel Bolques Jr., highlighting the importance of ensuring the tourism industry continues to contribute to the sustainability of government services and infrastructure without overburdening local residents.
Frett-Gregory also emphasized the importance of transparency and realistic budgeting. “Our expenditures must be based on historical trends and anticipated cost increases, not on wishful thinking. We found that in some instances, past budgets were overly optimistic, leading to revenue shortfalls. This time, we’ve worked to ensure we spend within our means.”
In addition to restoring cuts, the Senate identified new revenue streams to help bridge the gap created by the shortfall. “We identified a new funding source—a fee on international wire transfers—which is expected to raise $21 million to help close the revenue gap,” Frett-Gregory noted. The committee is also committed to finding other streams to secure additional revenue for the territory.
Further adjustments included funding increases in other critical areas, such as Fire and Emergency Medical Services, the Bureau of School Construction and Maintenance, and the Department of Veterans Affairs. For example, the budget now fully funds the Bureau of School Construction and Maintenance, ensuring it has the resources needed for ongoing and future projects. The Department of Veterans Affairs also received additional funding to ensure veterans can travel off-island for medical care and that their burial services are adequately supported.
The Senate’s budget package for FY 2025 includes numerous bills that fund essential services and agencies across the territory. These include appropriations for the Virgin Islands Board of Education, the Office of the Inspector General, the Virgin Islands Career and Technical Education Board, the Judicial Branch, the Waste Management Authority, and many others. Additionally, funding from various special funds, including the Anti-Litter and Beautification Fund, the Caribbean Basin Initiative Fund, and the Tourism Advertising Revolving Fund, has been allocated to support these essential services.
“This budget reflects who we are as a people and the values we hold dear,” Frett-Gregory said. “We have put forth a budget that truly serves the people of the Virgin Islands, ensuring that critical services are maintained and that our fiscal house is in order.”
