Post by Logan on Jun 10, 2016 5:26:35 GMT -6
V.I. Government Continues To Borrow To Meet Obligations; An Unsustainable Path, Administration Says
ST. THOMAS — Of the $777 million (excluding debt service and federal funding) of general fund monies from the Mapp administration’s $1.3 billion 2017 budget discussed at a budget overview hearing here on Monday, 59 percent has been allocated to salaries and benefits. There is little money in the budget for capital projects, which Governor Kenneth Mapp has staked his governorship on.
So in order to get those projects off the ground, the administration says there’s $147 million in existing bond monies available for capital projects that’s not tied to the 2017 budget, and the administration is getting ready to introduce legislation to borrow $200 million more; bringing the total in capital project funding to $347 million — all through bonds.
The keyword here is “bond”, or in layman’s terms, loans backed by the government’s rum revenue and other avenues like real estate. According to Office of Management and Budget Director Nellon Bowry, the government’s legal borrowing capacity is one-tenth of the assessed value of taxable property in the territory. This excludes government-owned property (Mr. Bowry said liens can’t be placed on government property so they can’t be used to back bonds), as well as nonprofits and federal property.
One-tenth of assessed property in the territory currently equates to $1.3 billion, according to Mr. Bowry. The government currently has $844.9 million in outstanding general fund debt (including debt service and other expenditures) — a mere $445.1 million way from the government’s legal borrowing limit — which Mr. Bowry estimates $734 million is accounted for through taxes, a mixture of which includes aggressive tax collection, growth in certain industries, expiring E.D.C. benefits, among other avenues. This leaves the government with a 2017 deficit of $110 million, $55 million to be covered with current working capital and another $55 million through budgetary savings and debt restructuring, said Mr. Bowry.
Read more: viconsortium.com/business/v-i-government-continues-to-borrow-to-meet-obligations-an-unsustainable-path-administration-says/
ST. THOMAS — Of the $777 million (excluding debt service and federal funding) of general fund monies from the Mapp administration’s $1.3 billion 2017 budget discussed at a budget overview hearing here on Monday, 59 percent has been allocated to salaries and benefits. There is little money in the budget for capital projects, which Governor Kenneth Mapp has staked his governorship on.
So in order to get those projects off the ground, the administration says there’s $147 million in existing bond monies available for capital projects that’s not tied to the 2017 budget, and the administration is getting ready to introduce legislation to borrow $200 million more; bringing the total in capital project funding to $347 million — all through bonds.
The keyword here is “bond”, or in layman’s terms, loans backed by the government’s rum revenue and other avenues like real estate. According to Office of Management and Budget Director Nellon Bowry, the government’s legal borrowing capacity is one-tenth of the assessed value of taxable property in the territory. This excludes government-owned property (Mr. Bowry said liens can’t be placed on government property so they can’t be used to back bonds), as well as nonprofits and federal property.
One-tenth of assessed property in the territory currently equates to $1.3 billion, according to Mr. Bowry. The government currently has $844.9 million in outstanding general fund debt (including debt service and other expenditures) — a mere $445.1 million way from the government’s legal borrowing limit — which Mr. Bowry estimates $734 million is accounted for through taxes, a mixture of which includes aggressive tax collection, growth in certain industries, expiring E.D.C. benefits, among other avenues. This leaves the government with a 2017 deficit of $110 million, $55 million to be covered with current working capital and another $55 million through budgetary savings and debt restructuring, said Mr. Bowry.
Read more: viconsortium.com/business/v-i-government-continues-to-borrow-to-meet-obligations-an-unsustainable-path-administration-says/