An Open Letter to o...
 

An Open Letter to our Executive and Legislative Representatives.  

 

IslandHops
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February 9, 2012 12:08 pm  

Interesting suggestions in this letter in the 2/9 Daily News......

Dear Governor, Lt. Governor, Members of the 29th Legislature,

There have been many good suggestions from your constituents regarding reducing government expenditures. I hope you all have the courage to take the steps necessary to reduce your numbers, and eliminate unrelated employment perks that we, as a territory, can no longer afford. Restructuring must include the need to increase the responsiveness and efficiency of all government departments. However, the purpose of this letter is not to address reductions in expenditure. Instead I implore you to implement steps to grow our economy by providing increased job/business opportunities, which will result in government revenue, without the need to increase taxes!

Firstly, I would like to address the need for manufacturing jobs in the territory. Companies face higher expenses when setting up and operating in our territory, and incur greater shipping costs. A suggestion is to set up a simple 'Export Company Status' for business that export 100% of their end product. We can encourage companies to manufacture here by eliminating the customs/excise tax on the import of specialized manufacturing equipment and raw production materials. If the end product is not for sale within the territory then we should not be taxing the raw materials used to produce it. This must be a simple program, possibly administered by the Economic Development Authority (EDA), without the need for excessive reporting or compliance issues. It can create job opportunities and bring taxable revenue to the territory while not subjecting potential new business to the complexities and delays of the full EDA/EDC benefits application process.

Secondly, we need to be able to encourage new businesses within the territory, and make it easier for existing small business owners to offer new employment opportunities. I would encourage the legislature to collaborate with the executive branch to create and pass the following measures to reduce the expense and administrative burden on businesses.

Fire inspections for all businesses would be valid for two years instead of one. The Department of Natural Resources (DPNR) Generator permits for all businesses would be valid for three years instead of two. This would immediately reduce the administrative burden on all business owners, the fire department, and DPNR.

Establish a new business classification for Home/Virtual Based Service Business - A service business operated from a residence, or mailing address. Examples of this would be landscape maintenance, pool maintenance, business consultant, etc. where the need for an office or facility is not required, and the revenue generating activities occur either remotely, or at the customers residence/place of business. These businesses would be exempt from Fire Inspections and DPNR approval. We need to encourage recently displaced workers and future local entrepreneurs to start new business without throwing up undue barriers.

Sole Proprietors/Partnerships with 5 or fewer employees (not including owners) could elect to operate under an 'at-will' employment category where employees would have to sign a statement stating that they can be released or reassigned hours/duties without recourse. These businesses would also be exempt from unemployment reporting and contributions, as their employees would not be eligible. The purpose is to allow small businesses to legally add and lay-off employees as needed, while paying payroll taxes, without being subject to excessive Department of Labor (DOL) legislation. Currently some employers elect to bypass the system by hiring as needed under the table, or using 'contract labor' where no taxes are collected by the government.

Next, we need to re-purpose the existing Department of Licensing and Consumer Affairs (DLCA) to become an advocate for creating, and sustaining, new and existing business. Too often DLCA, and other government departments, take an adversarial role to prevent new business instead of helping them navigate the system to a successful conclusion. Each and every member of staff at DLCA should ask themselves 'How can I help this new business get established and succeed?'. The process of business license applications simply disappearing without formal response must end. There should be clear guidelines for obtaining a business license and starting/executing a business. Simplifying the business license categories would be a good step. License applications should not be a source of revenues from annual fees, but be about helping business get formally established so they can grow the economy and provide tax revenue. Is it really necessary to have three separate business license categories for a Burro Farm, a Donkey Farm, and a Mule Farm, and are your inspectors really qualified to tell the difference without making an 'Ass' of themselves?

One possible solution is to merge the EDA with DLCA, splitting DLCA duties into two distinct functions; new/existing business advocacy, and enforcement/consumer affairs. Part of the role of advocacy would be assisting business in resolving issues with other government departments.

Which brings me to the need for DOL and Bureau of Internal Revenue (BIR) to be more responsive to their customers and to become advocates for resolving issues. I'm about to pay my 6th visit to BIR to resolve a 501VI payment from 2010, where the company has already supplied proof of payment as copies of the stamped payment and cancelled check. Yet the company continues to battle in order to receive proper credit and reverse penalties. Phone messages left with these departments are never returned, and correspondence never acknowledged. Businesses continue to receive notices of penalties due, even for erroneous DOL items dating back 12 years! And yet despite direct correspondence refuting the items, even addressing commissioners directly, no responses are ever received.
Something must be done to create a more conducive business environment; otherwise the barriers to economic growth will continue to exceed the level of entrepreneurial spirit and innovation. Increasing taxes, while a simple solution to the deficit will not help build our economy in the long term and it will likely cause many struggling existing business to fail, further reducing employment and government revenue.

Lastly, as a longer term challenge for you all, I implore you to work with licensed insurers in the territory to establish a Small Business Insurance pool. Open to all businesses with less than 25 employees, employees could purchase catastrophic and preventative health insurance at a reasonable cost. Employers would need to register (at no cost) in order for their employees to be eligible for the program, but the employee would be responsible for signing up and paying for coverage. Employers could elect to contribute towards coverage (tax deductible expense) paid directly to the insurance provider. Not only would this directly help individuals obtain coverage, and encourage healthier lifestyles through preventative care, but also reduce the burden of uncompensated care from our financially challenged hospitals.

Thank you for taking the time to consider the above suggestions, and I wish you all success in quickly developing real solutions to overcome the many difficulties faced by the territory in these challenging times.


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poorthang
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February 9, 2012 3:09 pm  

Does anyone know who wrote this?He/she doesn't sound like a "LOCAL".This person maybe a New Governor candidate ?Maybe the Great White Hope!!!!!!!:@)


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IslandHops
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February 9, 2012 5:09 pm  

Yes, the author is a full time resident of St. Croix, although not a born-here local.


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stiphy
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February 9, 2012 5:58 pm  

Excellent letter IslandHops, every single one of your points is well thought out and makes great sense. I've talked and thought about many of these same things not just now but since moving here 9 years ago and setting up a business a few years after that.

Sean


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Lucy
 Lucy
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February 9, 2012 6:52 pm  

Very well written and thought out. All of these points basically address improving of how we (the government) operates in a way that is conducive to ourselves and encourages investment in the USVI. Cut out the unnecessary steps and wasted time.

This is actually one of three priorities that the government should be working right on. And nothing else until we get out of the mess and on the path to recovery. The other 2 are:

- Right sizing the government to meet the needs of priority one and based on projected revenues ...let's have a balanced budget. Cut out all unessential functions until a time when we can afford them. Then decide if they should be re-introduced.

- Adopt an long-term energy plan. The high price of electric affects everyone and also inhibits growth / new investment. The WAPA plants are old and inefficient. WAPA has no money for modernization, so they push the responsibility off to outside developers (like Alpine) and then the rest of the USVI gets in the way. All technologies and operational scenarios should be studied and a plan approved / followed. This plan should include a set of phases. The first phase will address the current near term situation. The time is now. When Hovensa goes away in June, the LEAC will go up and so will our electric bills.

And I think there are enough smart people in the USVI, so we don't need an RFQ for some outside paid consultants to help. I'm sure there is at least one economist on the government dole that we should keep and consider the position essential. Plus there are probably enough private individuals and business leaders that would volunteer to help in order to right size this sinking ship.


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Lucy
 Lucy
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February 10, 2012 1:41 pm  

Here is a footnote to the story. The government's way of addressing the bloat is taxation. With excise and gross receipts, we are paying a minimum of 10%. GR "was" a temporary tax ... that will never go away. This was raised from 4% to 4.5% last May ... and in not more than a year it is up to 5% now. We are doomed.

http://stthomassource.com/content/news/local-news/2012/02/10/senate-passes-gross-receipts-tax-increase


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OldTart
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February 10, 2012 2:08 pm  

Here is a footnote to the story. The government's way of addressing the bloat is taxation. With excise and gross receipts, we are paying a minimum of 10%. GR "was" a temporary tax ... that will never go away. This was raised from 4% to 4.5% last May ... and in not more than a year it is up to 5% now. We are doomed.

http://stthomassource.com/content/news/local-news/2012/02/10/senate-passes-gross-receipts-tax-increase

If you read the article you will see that the Governor is seeking alternatives to the GRT.


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IslandHops
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February 10, 2012 2:31 pm  

If you read the article you will see that the Governor is seeking alternatives to the GRT.

To paraphrase, the article states that the measure passed by the senate included a provision to form a commission to investigate alternatives to the GRT.

The legislatures logic for increasing the GRT is flawed. The additional revenue probably won't be used to pay off the borrowing, it will simply continue to feed our bloated public sector. This 'effort' by the legislature is simply an attempt save government jobs during an election year, preventing the long overdue and much needed rightsizing of government to ensure a sustainable economy.

Congrats to Barshinger, James, Nelson, O'Reilly, Young, for attempting to make a stand.

Can't believe that Williams and Malone were not even present for the vote. Bad form indeed.


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Lucy
 Lucy
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February 10, 2012 2:36 pm  

Here is a footnote to the story. The government's way of addressing the bloat is taxation. With excise and gross receipts, we are paying a minimum of 10%. GR "was" a temporary tax ... that will never go away. This was raised from 4% to 4.5% last May ... and in not more than a year it is up to 5% now. We are doomed.

http://stthomassource.com/content/news/local-news/2012/02/10/senate-passes-gross-receipts-tax-increase

If you read the article you will see that the Governor is seeking alternatives to the GRT.

I did read the article. When / where does he mention anything about a review of government processes that are unessential or could be streamlined. His easy answer has been increase taxes. I agree with a sales tax, in lieu of both GR and excise. Then it is all totally transparent. It makes a lot more sense.

Upping the tax is a hard pill to swallow but necessary for a short term fix. But it would go down a lot easier if the govt. was being right-sized at the same time.


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islandjoan
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February 10, 2012 2:38 pm  

The source article says:

The same amendment also mandates the creation of a new seven-member volunteer commission to "study, analyze and develop a plan for the replacement of gross receipts taxes by new revenue measures to eliminate any undue burdens on taxpayers," and file a detailed plan for its replacement by the end of August.

The governor would appoint two members to the commission, and the president of the Legislature would appoint the remaining five.

One thing they need to do is increase tax on cigarettes and alcohol. That would bring in a fair amount of revenue. Also they can CUT their salaries back down to where they were before 6905! ALSO - the missing $6.9 million needs to be returned! And Chuckie, Ronnie, and the rest need to pay back their back taxes owed: Chuckie, $178,000, Russell over $100,000, Malone, $7,000, White $11,000, adjutant general Rivera, $87,000.

Not sure they need a freaking commission that will take months to come up with some plan.


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OldTart
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February 10, 2012 2:47 pm  

When / where does he mention anything about a review of government processes that are unessential or could be streamlined.

Maybe because the article wasn't addressing those issues ...


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Lucy
 Lucy
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February 10, 2012 3:14 pm  

But the government never wants to look at "those" issues, because it is hard. They take the easy way out. I never saw anywhere where the Governor talked about modernizing operations. Plus a commission OK. But why will it take until August? And they are to look at "revenue measures". Nothing will address the current inefficiency and unessential / duplicate functions. Anyone that is OK with the way government runs now should be pleased as hell.


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Iris Tramm
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February 10, 2012 3:16 pm  

Yes, the author is a full time resident of St. Croix, although not a born-here local.

And if he is who I think he his, he has a lovely accent that makes the above a dead giveaway.


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OldTart
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February 10, 2012 3:30 pm  

Yes, the author is a full time resident of St. Croix, although not a born-here local.

And if he is who I think he his, he has a lovely accent that makes the above a dead giveaway.

I don't know of what relevance it is but the letter which was printed in the Daily News was credited to "Scott Johnston (who) lives on St Croix".


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IslandHops
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February 10, 2012 3:39 pm  

Yes, the author is a full time resident of St. Croix, although not a born-here local.

And if he is who I think he his, he has a lovely accent that makes the above a dead giveaway.

I don't know of what relevance it is but the letter which was printed in the Daily News was credited to "Scott Johnston (who) lives on St Croix".

And yes, while the author may have lived under several flags (like our fair island itself) and maybe has an accent, he is a US citizen, tax-payer, land-owning, registered voter, and full time STX resident.


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OldTart
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February 10, 2012 4:07 pm  

And yes, while the author may have lived under several flags (like our fair island itself) and maybe has an accent, he is a US citizen, tax-payer, land-owning, registered voter, and full time STX resident.

I wasn't sure what the relevance of the comment was but it almost sounded like one of those, "Obama's not a US citizen" things. 😀


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Iris Tramm
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February 10, 2012 11:06 pm  

Oh please, people. Check yourselves. It was not a criticism. I know Scott from sailing. He's a Kiwi and, as a credit to his homeland, is an accomplished sailor. And he DOES have a lovely accent. It was a compliment. Nothing more. Return yourselves to more important things.

ETA: I don't personally believe that there are actually more important things than sailing. But that's just me.


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