U.S. Virgin Islands governor Kenneth Mapp is proposing a fiscal year 2018 budget with 9.2% less spending.
On Thursday Mapp sent a letter to Senate President Myron Jackson explaining that his proposed budget allotted $713 million for executive departments, legislature, and the judiciary. This would compare to $784.9 million for these things in the current fiscal year budget.
The Governor is cutting spending with an an eye on moving toward a structurally balanced budget. All three ratings agencies rate the islands’ matching funds and gross receipts tax bonds at speculative grades.
The fiscal year budget would have $90.3 million for the island’s gross receipts tax bonds, which the island gives the general obligation pledge to, and $30.6 million for income tax refunds.
Mapp said the proposed budget assumes no debt financing and no new taxes.
“The budget assumes a vigorous and aggressive set of enhanced collection initiatives focused on more vigorous enforcement of existing statutes and collection of outstanding amounts due to treasury.” Mapp estimates these initiatives will generate $74.4 million.
Mapp is also proposing to cut the government’s contribution to retirees’ health insurance costs. Some of this savings will be used to bolster the Government Employees Retirement System, whose funded levels have been declining over the last decade.
The Virgin Islands’ fiscal year starts on Oct. 1.
The islands’ government has about $1.9 billion in debt, not including what is owed by the public Water and Power Authority.