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The government’s Chief Labor Negotiator Dr. Valdemar Hill explained to representatives of unionized Virgin Islands public employees that postponing scheduled salary increases and delaying further negotiations was a necessary measure forced by extraordinary economic times. At a meeting on Tuesday convened to explain the decision, Virgin Islands Office of Collective Bargaining officials fully informed labor leaders of the government’s precarious financial standing and the need to hold salary increases.
“This was a difficult decision, one that was not made lightly,” said Chief Labor Negotiator Dr. Valdemar Hill. “In fact, this is the only responsible decision in light of projected revenue shortfalls, much higher than once anticipated. The territory's fiscal projections for 2011 describe a shortfall of more than $82.5 million; and more than $106 million for fiscal year 2012. The severity of these deficits made necessary the decision to cease negotiations as there is no way to know if the future will make any changes in monetary or non-monetary contract provisions.”
“Government leaders must provide responsible financial leadership in times of uncertainty and fiscal crisis,” added Dr. Hill. “If the Virgin Islands is to weather the current global economic downturn that has created deep budget shortfalls in government coffers across the Territories and the United States, everyone, including government employees, must be willing to sacrifice for the greater good of the U.S. Virgin Islands.”
The Office of Management and Budget sent Governor John P. deJongh a letter on Dec. 27 outlining the issues that forced the decision to postpone raises. Director Debra Gottlieb wrote, “…I am hereby recommending that the implementation of the pending salary increases that are currently estimated to cost approximately $36-$41 million and all scheduled union negotiations for increased salaries and benefits be postponed.”
The Virgin Islands is not unique in its financial woes, nor is it alone in implementing difficult measures to get through the present crisis. Across the country, from New York to California, U.S. states have frozen or cut salaries, benefits and pensions for public employees. Puerto Rico has dismissed and sent home tens of thousands of employees. Public sector employees are not exempt from the forces that affect private sector employees here or abroad. Federal, state and municipal governments are dealing with budget crises that have stripped revenues. Private sector employees in the Territory have been experiencing dismissals, lay-offs, reduced benefits, reduced hours and the like since the recession began.
“In this time of worldwide economic uncertainty and decreased revenues, it is simply unrealistic and unfair to increase salaries across the government while the prospect of losing their jobs still looms for many public employees. Foresight and creative financial management allowed us to stave off layoffs while millions of Americans are out of work. With more than 14 million Americans out of work, the Virgin Islands has been fortunate to avert the loss of thousands of public jobs,” Hill said.
“We are living through one of the greatest economic recessions our country, and this territory, have ever experienced. Revenues do not support scheduled raises—this is the economic reality we must confront and address to ensure our schools stay open, we meet the challenges of health care reform, and we protect our community by providing critical public safety and social services,” Gottlieb said.
The Administration is calling for the best efforts of every public employee in these trying times, asking them to continue to work hard each and every day as they always have. If this call is heeded, when the global economy recovers, the territory will find itself in better financial health, and in position to continue its economic and social progress.
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