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34th Legislature to Enact Legislation to Repay VIESA Debt by December 2021

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Donna Frett-Gregory
Senate President Donna A. Frett-Gregory
Virgin Islands Legislature

St. Thomas, USVI – Senate President Donna A. Frett-Gregory announced last week that the 34th Legislature will be considering legislation at the next Legislative Session to repay the 8% VIESA debt owed to government employees. The proposed legislation will repay affected government employees by December 31, 2021. As the entity that is responsible for identifying and appropriating funds, the 34th Legislature has been diligently working since January through its committee and subcommittee process on reviewing and verifying the government’s collections and expenditures so that legislation can be crafted to address critical bread and butter issues facing the community. 

On June 3, 2021, the Committee on Finance heard the FY2022 Budget Overview from the Executive Branch’s Financial Team. The financial team verified that revenue collections continue on a steady incline. When asked if there was a plan for the utilization of the excess collections for the prior year and potential excess this year, the financial team indicated that there was not a plan in place. “It is clear that the executive branch does not have a plan in place to utilize the excess revenue collections,” stated Senate President Donna A. Frett-Gregory, “The repayment to VIESA affected employees is a liability that can be addressed in the current fiscal year with a supplemental appropriation.” 

Despite the influx of federal dollars and the increase in revenue collections, the Virgin Islands government continues to have a structural deficit, due in large part to the GERS. The 34th Legislature created subcommittees to focus on critical issues, with one subcommittee focusing on GERS. The subcommittee has been working on measures to address GERS with some measures to be put in place in the FY 2022 budget.

We have been focused on drafting legislation to address GERS since the 33 rd and have draft legislation to support utilizing the revenues generated from the collection of excise taxes to stabilize the system. We are committed to making incremental steps during this year’s budget process to begin addressing the system’s challenges. The Legislature has determined that it is prudent to pay the VIESA debt this year and not continue to carry this liability forward. “Now is the time to repay and make government employees whole,” Senator Kurt A. Vialet added, “We will have the funds available in FY 2021 to repay the 8% to all affected government employees, it is the right thing to do.” 

The Legislature will be convening a Committee of the Whole on June 23, 2021, to discuss the expenditure of COVID-19 related federal funds and the status of Cares Act funds, along with proposed legislation that will require Legislative approval for the expenditure of federal stimulus funding. “We have to address these one-time obligations, so we can focus on addressing the long-term deficiencies,” concluded Senator Frett-Gregory, “The Legislature is responsible for appropriating funds, and we have to ensure that when it is all said and done, we are better for it.” The legislation to repay the 8% VIESA is sponsored by Senators Kurt A. Vialet, Donna A. Frett-Gregory, Novelle E. Francis, Jr. and Janelle K. Sarauw.