There may be some hope for the Government Employees’ Retirement System in the Fiscal Year 2022 budget, Sen. Kurt Vialet said Monday during a meeting of the Senate Finance Committee at which dozens of budget bills were advanced to the Committee on Rules and the Judiciary.
“The budget that came down from Government House was like $945 million and this budget is $919 million,” said Vialet, the chairman of the Finance Committee, a difference of $26 million. “We came in under which gives us some flexibility, and we have had the discussion about being able to put some money towards the Government Employee Retirement System. So, we do have that sub-committee meeting on the 20th, and we will have that particular bill there and have the discussion as to how we want to proceed.”
The GERS has been paying out more in benefits than it has been collecting in member contributions for years, and is expected to deplete its funds within the next couple of years, at which time retirees will see their monthly benefits reduced by more than 50 percent. In 2019, the program’s unfunded liability was more than $4 billion; its assets and projected income are less than 16 percent of the total liability for present and future pensions.
After discussion, Vialet said the Finance Committee will schedule a meeting “that will address bills that are solely for the GERS. We are not saying that we are going to be able to immediately solve the problem in one swoop, but we will begin to decrease the monies that they have to draw down on a regular basis.”
Sen. Novelle Francis Jr., who is not a member of the committee but attended the hearing, said the budget is open-ended.
“The budget is really a process of projections, and there is still a number of unknowns we continue to experience,” Francis said. “Just today, Limetree laid off some 35 employees. Our revenues continue to be under siege. While we continue to project, we have to continue to be good stewards of the government coffers.”
Because the budget is based on projected (or expected) revenue collections, there have been effects on the budget unique to the last pandemic-riddled years.
“Last year we were impacted by $156 million in stimulus funds. That’s significant. That’s $156 million of individuals going out there spending money, purchasing stuff, shopping, furniture, etc., and then we are collecting the taxes off that,” Vialet said. “We were also heavily impacted by the increase in SNAP benefits. The SNAP benefits given to all students who were out of school because of virtual learning. That was an impact to the coffers of the Government of the Virgin Islands.”
This type of tax revenue is a large part of the “budget moving forward,” Vialet said, and “has to do with these disaster recovery projects coming online.”
Vialet said the Executive Branch projected to bring “more than $500 million of projects online within the next fiscal year. Those numbers are included in this budget. They need to hit that $500 million.”
If the Executive Branch fails to deliver, Vialet said a revision of the budget would take place and entities could expect a “decrease in the numbers and appropriation to those respective government departments.”
The budget bills still need to advance the Rules and Judiciary Committee and the full body, but Sen. Marvin Blyden said overall the budget process this term has been a good one.
“I believe we did a proper vetting of the different departments. We crunched the numbers … during the mark-up process we called back many department heads … and then went over the numbers again,” Blyden said.
Sen. Donna Frett-Gregory said the budget process “has been a long, long arduous task,” but the committee was “able to put forward a balanced budget. I think that’s the most important.”
Sens. Marvin Blyden, Samuel Carrion, Dwayne DeGraff, Kurt Vialet, Donna Frett-Gregory, Javan James Sr., and Janelle Sarauw were present for the hearing. Additional non-committee members also attended the hearing.