Testimony
The Finance Committee Hearing Testimony
The Finance Committee Hearing of
February 15, 2017
Chairman: Senator Kurt A. Violet
Vice-Chairman: Senator Marvin A. Blyden
Earle B. Ottley Legislative Hall
St. Thomas, Virgin Islands
Testimony From The St. Croix Government Retirees, Inc
Good Morning Senators of the 32nd Legislature:
St. Croix Government Retirees, Inc. (SCGR) is an organization of V I Government retirees dedicated to the preservation of the Government Employees Retirement System (GERS). The SCGR was organized four years ago and was registered as a non-profit organization in February of 2013.
The members of the St. Croix Government Retirees, Inc. feel impelled to voice our opinion on your consideration of the "sin tax" on liquor, tobacco, and other products. Members of our group, in an effort to advocate for the survival of the GERS, met with senators of the 30th and 31st Legislatures with a list of suggested funding sources and initiatives. On that list was a "sin tax" on liquor and tobacco products with a percentage of the proceeds to go to the GERS. At that time, most senators said they would research the effect of such a tax to see what would be feasible. Our recommendation was based on the attempt in the 29th Legislature by Senator Raymond "Usie" Richards Act 7458, Bill No.29-0444, section 21, which was vetoed by Governor DeJongh on December14, 2012.
When it comes to our government's ability to balance its budget, we recognize that the "sin tax" is the most viable alternative for a short-term solution. We, the members of the SCGR, having suggested this as a means of funding the GERS, have thought out the consequences of such a tax on these non-essential goods. We realize that the tax would affect the bottom lines of those businesses that sell these goods. But just as businesses quietly pass on the cost of WAPA increases to customers, they would also be able to pass on these tax increases on non-essential goods to customers. Given the historical tax advantage that these businesses have enjoyed, it is fair to implement Governor Mapp's suggested "sin tax" at this time. We also suggest that the tax be implemented for a twenty-four-month period so that the effect of the tax can be analyzed while the immediate funding needs of the government can be met.
We understand that it is the mandate of organizations such as the Chamber of Commerce to advocate for the interests of their members. To them, the net profit of a business must be maintained and increased above all other concerns. However, the mandate of our elected government officials is quite different. We expect that your mandate is to provide for the needs of the entire territory to the best of your ability. Issues such as an increase in electric rates affect us all negatively and automatically increase the cost of living for all businesses and residents. To our knowledge, The Chamber of Commerce has not addressed these added expenses. We make this comparison because the same group of people, your constituents who live and work here in the Virgin Islands, are repeatedly being made to pay more, while those who make profits on items that are mainly used by tourists are protected.
The Government Retirement system remains in jeopardy, and the condition of the VI Government's budget does not bode well for the possibility of huge past-due contributions being paid. The collapse of the GERS continues to be the greatest threat to our VI economy. If over 8,500 retirees lose their main source of income, there will be an instant growth in poverty. The VI Government cannot provide for such large numbers needing public assistance. The businesses would lose a significant portion of their customers. Taxes deducted from GERS checks would cease.
The promised $100 million contribution to GERS by the 31st Legislature never materialized. Please be reminded that as our elected officials you, our senators, have a fiduciary responsibility to honor what is owed by previous administrations and legislatures through legal contracts with employees of the Virgin Islands Government. Right now, current employees are forced to pay up to 11% of their income into GERS which they keep hearing will fail in four to five years. Many of your constituents cannot believe that retirees will be left in poverty and will have to depend on others in their elder years. There is the added effect on young people in our community. A reduction in money circulating in our economy, layoffs, increased cost of living and growing health costs will further disillusion them and encourage them to join the growing number of people who feel forced to leave the islands. The more people leave, the less money goes into the government coffers, and the less money is contributed to GERS every payday. Yet, nothing is happening to ward off this dreadful end. We again ask that some percent of the proposed taxes be designated for the Government Employees Retirement System in an effort to keep it alive.
Respectfully submitted by
The St. Croix Government Retirees, Inc.
Phyllis M. Nehlsen, Advocacy Committee Chairperson
Phone : 340-718-5027
Email: neh50sen@gmail.com
Mailing Address: PO Box 749, Christiansted, V.I. 00821
