ST. THOMAS – Three months after signaling that his government would use consumption tax revenues to fund the repayment of the 8% pay cut for public sector employees, Governor Albert Bryan Jr. has tabled legislation to make that happen.
Bryan said in a transmission letter to Senate President Donna Frett-Gregory on Friday that the VI government is proposing to begin repaying wage cuts under the VI Economic Stability Act of 2011 in FY 2021 and in FY 2022 “until” the of VIESA affected employees receive a share of the funds on the VIESA consumption tax account established by the legislation, which is determined at the discretion of the governor. “
According to a Government House statement, workers’ rights to payment under the proposed bill will “end when the worker’s repayment amount is zero”.
“This includes all workers in the unions who challenged the action and those who were not union members but are affected by the application of the law,” wrote Bryan.
Bryan reminded Frett-Gregory in his letter that he wasn’t just paying back retro wages from 2011 in his state as early as January – as the 34th executive budget last week.
“I intend to make payments under the United Steel Paper and Forestry Rubber Manufacturing Allied Industrial and Service Workers International Union AFL-CIO-CLC v. Virgin Islands Government, No. 14-4357, and St. afford to . Croix Federation AFT Local 1826 against Governor of the Virgin Islands, No. 14-4358… ”he wrote.
Frett-Gregory made her own statement in response, noting that the Senators have their own plan to repay the debt much earlier, by December, rather than beyond the two-year period Bryan announced.
In addition to Frett-Gregory, Senators Kurt Vialet, Novelle Francis Jr., and Janelle Sarauw are sponsors of the 34th Legislature’s repayment plan.
“Legislature has decided that it is prudent to pay off the VIESA debt this year and not to carry this liability forward,” said Frett-Gregory.
A hearing in the committee as a whole is scheduled for June 23 to discuss the 2011 wage repayment and other measures. The repayment of the 8% pay cut will be dealt with during the upcoming legislative period, according to Frett-Gregory’s statement.
Governor John de Jongh Jr. signed Bill 7261 in 2011 after it was passed by the 29th Legislature under the direction of Senate President Ronald Russell. De Jongh referred to the current global economic crisis and the precarious financial situation of the territory when signing the law. The unions quickly filed a lawsuit calling the pay cut unconstitutional.
A subsequent Court of Appeal ruling in their favor was issued in 2016 during the administration of Governor Kenneth Mapp, who said the Territory must accept the federal court ruling and repay those affected.
“We will include all workers affected by the cut. In unions, in all unions and outside of unions, ”Mapp said during a press conference on December 12, 2016. He said the court ruling was valued at 65 million US dollars at the time.
Mapp eventually proposed a number of revenue-generating initiatives under its proposed VI Enhancement and Economic Recovery Act (VIEERA), including “sin taxes” on alcohol and tobacco products, and taxes on timeshare units to pay the rebates.
The payments would have been released over a two-year period, with the payback going to unionized and non-union workers, both current and non-VI government employees, Mapp said at the time.
Vialet stated in the statement issued by Frett-Gregory that “now is the time to repay the government employees and make them whole”.
In 2017 he was chairman of the Senate Finance Committee, which, despite opposition from residents and companies, finally approved an amended version of Mapp’s proposed VIEERA law on the “sin tax”. While the approved version added new taxes on tobacco, alcoholic beverages and sodas, it removed a provision that deferred most of the timeshare fee revenue for paid workers affected by the 8% cut.
Until Molloy’s ruling in March, the area has been banned from collecting more than $ 84 million in excise tax revenue since former U.S. District Court judge Curtis Gomez issued an injunction in 2018.
Gomez noted that the VI government had failed to collect excise duty on local manufacturers for more than 30 years, essentially penalizing importers of goods with an additional tax in violation of the U.S. Constitution’s trade clause.
The VI government appealed to the 3rd Court of Appeals, which dismissed the case, ordering that if the government could demonstrate that it had begun collecting excise taxes from manufacturers, the injunction should be lifted. Molloy ruled positively after the government raised $ 26.61 million from two manufacturers.
At a press conference in March, Bryan’s spokesman Richard Motta announced the governor’s intention to repay the debt with revenue from excise duties.