V.I. Government Isn't Broke, Bryan Says, Instead, Careful Management of Funds Ensures Stability

“We have challenges because we don’t have a good tax base,” Governor Bryan told the Consortium on Monday, shrugging off a question about whether the economy of the Virgin Islands was currently experiencing a structural deficit. “It depends on how you define structural deficit,” he remarked.

According to the Organization for Economic Co-operation and Development (OECD), a structural deficit is one “which would persist if the economy were to grow steadily at its highest sustainable employment rate, i.e. at the same rate as potential output.” In less technical terms, an economy in structural deficit cannot generate sufficient revenue to cover its expenses even when growing at its fastest possible rate.‌

The question arose out of the territory’s long history of struggling to pay its bills. For months, a common refrain before the V.I. Legislature’s Committee on Budget, Finance and Appropriations has been government agencies and departments admitting that they struggle to maintain control over growing accounts payable rolls, with vendors having to wait protracted lengths to receive payment for outstanding invoices.

Most recently, major provider of healthcare service professionals Pafford recently pulled up stakes, exiting the territory over a $10 million accumulation of unpaid invoices. In April, the total amount owed to various vendors by the government of the Virgin Islands stood at over $80 million, lawmakers disclosed, with government departments ranging from Public Works, Tourism, Waste Management, all owing local vendors. Millions in retroactive wage payments are also outstanding, with some of the funds allocated for those payments being redirected to satisfy other, more pressing needs.