What's Plan B?

I'm going to sound like a curmudgeon but you couldn't pay me to go on a cruise ship, too many people and I've never liked all-in-one resorts.  Give me a great location, a house, a pool, a beautiful view, family and friends, far superior IMHO.  That said, I agree it may take the cruise industry, and maybe the whole travel industry, many years to recover to 2019 levels.  COVID-19 is a bit of a seed change for many industries, it will be a huge boost for some and a new normal (very different) for others.  One thing that could be a big benefit for the USVI's is that working remotely is now much more accepted and common.  Many companies are now convinced that high levels of productivity and efficiency can be achieved working remotely and will be much more open to allowing employees the freedom to live almost anywhere.  I think a lot of professional young people will jump on this.  But vacation on a cruise ship...no thanks.

STT certainly gets a lot of non-cruise vacationers.  Will need to rely on that more.  Warnings have been out for a while now that cruise ships calls to STT were going to decline unless STT re-invented itself as a destination.

There is no Plan B. The VI government does not have the foresight to look beyond the next election. When the government is run by a one party system, you can't expect anything more.  

Posted by: @cruzaniron

There is no Plan B. The VI government does not have the foresight to look beyond the next election. When the government is run by a one party system, you can't expect anything more.  

 

Well said, Sir! So true.

I'm not sure if it's just me but reading the recent articles in the VI Consortium about the unending laundry list of Government related financial disasters all coming to a head now, it seems to me that COVID-19 may be the straw that finely breaks the proverbial camels back.  It looks like just about the time the Government can declare victory having contained the viral infection the patient will have died from economic malnutrition and/or malfeasance, a classic pyrrhic victory.  Who in heavens name would want be part of the VI Government as we head into what is certainly a Category 5 budgeting storm, there is no win-win outcome.  So my reaction is "Plan B", it's way bigger than a "Plan B", it looks a lot more like the Governmental equivalent of section 11 bankruptcy (court managed reorganization) and its the needy that will suffer most, what a mess.

Posted by: @jaldeborgh

I'm not sure if it's just me but reading the recent articles in the VI Consortium about the unending laundry list of Government related financial disasters all coming to a head now, it seems to me that COVID-19 may be the straw that finely breaks the proverbial camels back.  It looks like just about the time the Government can declare victory having contained the viral infection the patient will have died from economic malnutrition and/or malfeasance, a classic pyrrhic victory.  Who in heavens name would want be part of the VI Government as we head into what is certainly a Category 5 budgeting storm, there is no win-win outcome.  So my reaction is "Plan B", it's way bigger than a "Plan B", it looks a lot more like the Governmental equivalent of section 11 bankruptcy (court managed reorganization) and its the needy that will suffer most, what a mess.

Unincorporated territories such as the VI can't file for bankruptcy. That's why PR has PROMESA with its oversight of government activities. In 2016, the VI was offered the opportunity to have a PROMESA type program to help resolve its debt issues but it was declined.

https://www.nbcnews.com/news/latino/here-s-how-promesa-aims-tackle-puerto-rico-s-debt-n601741

@gators_mom

So what happens then? U can't keep going into debt because no one will lend to you. What happens when you run out of money?

Posted by: @stxdreaming1

@gators_mom

 

So what happens then? U can't keep going into debt because no one will lend to you. What happens when you run out of money?

PROMESA style program may end up being the only choice - or another hurricane to attract federal money so the can may be kicked down the road again. 

The VI, just like PR before, has borrowed money to cover annual operating expenses without making necessary adjustments to its business plan to either increase revenue (taxes and fees) or cut structural expenses.

Borrowing for special projects through bonds is very different from borrowing to meet payroll.  

You may find it interesting that several years ago while Obama was still president, the VI held a constitutional convention and put forward a document for Congressional approval. In it, the writers declared "ancestral Virgin Islanders" would not have to pay any VI taxes FOREVER. That's the unfortunate circumstance in the Virgin Islands - financial responsibility rests with "continentals" and others. Obama stopped this.

Utter lack of fiscal responsibility will one day see consequence. 

The Fifth Constitutional Convention was a gigantic mess. https://en.wikipedia.org/wiki/Fifth_Constitutional_Convention_of_the_U.S._Virgin_Islands. Gov. de Jongh was even embarrassed by it. I have no idea how much money the committee spent flying back and forth, not having a quorum, and going home. Every once in awhile, they try for a Sixth convention. LOL

Posted by: @east-ender

The Fifth Constitutional Convention was a gigantic mess. https://en.wikipedia.org/wiki/Fifth_Constitutional_Convention_of_the_U.S._Virgin_Islands. Gov. de Jongh was even embarrassed by it. I have no idea how much money the committee spent flying back and forth, not having a quorum, and going home. Every once in awhile, they try for a Sixth convention. LOL

Personally, I don't think that we need a new constitution. I specifically voted for Bert Bryan to be on the committee because I KNEW that he would push for things that had no chance of approval. 

Relying on tourism is never a good idea, so glad Lime Tree is restarting the refinery. The first thing to go when times get tough, is an expensive vacation. 

Did the governor get the 60 million from the local banks he was looking for? How long will 60 million last? Then what? The problem will only be worse.

It looks to me as though they’re purposely digging us into a hole we’ll never be able to climb out of. I think their overall plan is to wait for federal oversite. Once that’s forced upon them, they can blame Trump for any unpopular decisions later. 

*But then again (what a joke) we’re going to make billions on Cruzan marijuana sales. 

I am sure the problems are all caused by racism. BLM to the rescue! A few riots, burn down the refinery then blame Trump for not sending more money down during the pandemic.

Whenever there is a problem it is always someone else's fault.

Lack of fiscal responsibility by the VI government goes back many years - long before Trump. The Obama administration offered PROMESA to the VI at the same time as PR in early summer 2016. But the reopening of the refinery was nearing so the offer was summarily dismissed. Unfortunately, the VI is always one disaster away from financial collapse so here we are again. Since fall 2017, we're on our third if you count Irma and Maria separately.

Whoever the next US president is, he will inherit resolving the fiscal collapse of the VI. I think the proposed bank loan will cover expenses for a month or two.

Now imagine the VI government having to report to an external oversight board. It will be a special hell for some I'm sure.

The VI does not have a constitution if you don't count the US Constitution. What a joke that the Hugo looter Adelbert Bryan (no relation to Albert) would be selected to serve on the VI's constitution committee by a pubic vote no less. A 2020 ballot issue may temporarily resolve this issue.

https://stthomassource.com/content/2020/05/15/voters-might-consider-a-virgin-islands-constitution-on-november-ballot/

Nothing will change until the government is insolvent and the Feds come in to take over. The Government of the VI is not capable of getting out of the current situation. The tax base is too small to support the size of government that they have.

As an example, the State of Wyoming which is the least populous state, has 5 times the population of the Virgin Islands but only half as many government employees. They have a part-time legislature. 

The USVI is not capable of cutting costs. They need to lay off half of the government employees. They have already stopped paying into the retirement program. Everyone involved with GERS is going to be disappointed with their retirements.

The USVI is run by Democrats, borrow and spend. Future? No one has the guts to make the necessary cuts in spending. The court has ordered the government to pay GERS but they have no money. The solution? Raise taxes. If you think it is expensive to live in the USVI now, just wait. The most likely plan is to implement a sales tax, a high one. They would probably exempt locals and try to stick it to the tourists. That is one of the problems, every one here thinks that they are being taken advantage of. They will price themselves out of the tourism market. The crime is already bad for tourism, wait until the cost to visit the VI skyrockets. The Dominican Republic will look much more inviting.

The last VI constitution failed because it was unconstitutional. They tried to carve out "special" rights for native virgin islanders, no taxes, only native governor and lt. governor, etc. Yet they want equal rights when native virgin islanders move to the continental US. Until adults are running the territory nothing will change.

@rotorhead

Your comments are always spot on.

I'm glad you're still contributing even though you've smartly moved on.

We won't be far behind.

VI has already excise tax, import tax and self employment tax and equivalent of federal income tax. The tax revenue stays here and it is a nice chunk of change while the local government has no responsibility for defense, federal enforcement, foreign affairs, Medicare or SSI.  On top of that they constantly get money from the feds. They need to learn to manage on what they get. If they introduce territorial sales tax and income tax then the game will be over for entrepreneurial people and wealthy mainland retirees. Lots of wealthy mainland peeps have homes here and can run a business from here. 

The government here could be run on 20% of employees if one could lay off the useless 80%. That 80% is unemployable and would end up on welfare anyway so it is probably wiser to keep them on the payroll. This is quite noticeable thought the Carribian and not exclusive to USVI.  The problem with the bloated government is that it is essentially a malignancy chocking local economy as bloated burocracy doesn't contribute any added value but rather creates a roadblock to enterprenurialship.   

Just look at business license waiting period or navigation through EDC. Lots of institutions here require production on original social security card to open bank account or obtain a professional license. It is unheard of on the mainland as its easy to verify numbers with IRS directly.  As one of my friends said “if you want to make a small fortune in VI you have to start with a big one” 

It seems to me that the government just continues to raise taxes on the people who are paying them and spends little to no time going after the people that don’t pay at all.   If the IRB doesn’t have a sophisticated enough of a system to produce a report of filed W2s and 1099s that don’t have a 1040 filed for them yearly than its time for a serious upgrade in software.  And the IRS should be better trained in how USVI residents need to file and where to file.  There are a lot of transplants I have know over the years who still file with the IRS instead of the IRB.  St John is definitely getting to the point where it’s almost impossible to live here on moderate income.  

@vicanuck

I just moved away from STX after 22 years. I am very happy. It's kind of like boat ownership. The two happiest days of your life are the day you buy your house on st croix and the day you sell it.

When you first move to the VI you are full of hope. Beautiful islands, friendly people, paradise. After a while you start to notice the little annoying things that you hope that you can fix or that will get better.

I have decided the only way to survive WAPA is to leave it. Solar. Non-grid tied. The new net metering plan is terrible and you still go down when WAPA goes down, which is often. It's always been bad, but has gotten worse over the years. It was one of the things that I had hoped would improve.

Internet. The speeds are terrible and the reliability is terrible.

The roads have gotten worse over the years. They have always had many potholes but there are many more vehicles on the roads now than there were 20 years ago and potholes don't fix themselves and neither does public works.

Medical care. What can I say. No insurance available and I would never voluntarily go to the hospital. I have used Plessen for a few years and they are much better. The last time that I went to the hospital was for blood tests that couldn't be done at sunny isle. I had to go 3 times for the tests. Two times they lost the blood samples and the third time they drew the blood into the wrong vials which required retaking the tests. I said no thank you, 3 strikes and you're out. I had the tests done the next time I was in the states.

Everything comes with a paradise tax. 

I moved about a month ago. About the same size house in both places. My electric bill is about 1/5 of what it was on STX and we have not had a single power outage. My Internet went from about 10Mbps for $100/month to 1Gbps for $80/month. Not a single Internet outage.

No potholes. The worst road that I have to drive on is my own gravel driveway. I can fix that.

Medical care. We have good hospitals and good doctors here. Insurance is available.

I loved my time on St Croix. Some of my island family still live there. Many want to leave. It is a great place for an adventure with warts. Not a great place to retire and grow old in.

Just my thoughts, each to his own.

Well put Rotorhead.

Ive been here three years full-time now, and your right about how you “start noticing the little annoying things”. I too, hope to see improvements, but “when” seems to have always been the big question here. 

I keep reading and hearing about how federal money has been set aside for major improvements (new hospital, road repaving, healthcare options etc...) but don’t see much action. 

I was very fortunate to have been able to retire at 50. I like to consider myself young and healthy. If we were much older, I doubt my wife and I would have ever moved here. Within the next five years we hope to have our home ready for our true golden years (more comfortable, easier to maintain, windstorm proof, off grid). We hope within the next ten years, the new hospital is up and running and basic infrastructure is better. If not, there’s a good chance we’ll have to leave the most beautiful place we’ve ever lived.

Moving here certainly is a roll of the dice. As so many before us have done, we hope for the best, the potential here is truely incredible.

To sum things up, I’ll admit I’m a big fan of the novelist James Mitchener. In nearly all his epic novels, it was the people who got to the next up and coming place first, who really made out. St. Croix, we’re hoping, is that next place.

Posted by: @stjohnjulie

It seems to me that the government just continues to raise taxes on the people who are paying them and spends little to no time going after the people that don’t pay at all.   If the IRB doesn’t have a sophisticated enough of a system to produce a report of filed W2s and 1099s that don’t have a 1040 filed for them yearly than its time for a serious upgrade in software.  And the IRS should be better trained in how USVI residents need to file and where to file.  There are a lot of transplants I have know over the years who still file with the IRS instead of the IRB.  St John is definitely getting to the point where it’s almost impossible to live here on moderate income.  

As long as my employer is in FL, FL will continue to be my tax home and I will file with the IRS no matter if I live in FL or the VI. I cannot become a bona fide VI citizen per IRS rules.  The bar is relatively high to escape the grasp of the IRS even though many would find it favorable to be in IRB jurisdiction.

Blame the VI for initiating the EDC shenanigans in the 1990s that offered territory residency and tax avoidance for anyone who had enough money to pay, IRS did not take kindly to that so here we are. 

The best approach IMHO is self reliance, to insulate ones self from any dependence on the government, this is true on the mainland as well, as the world seems to have gone nuts everywhere.

WAPA is bad, to that end we’ve installed a solar system w/battery back-up that does work when the grid goes down and with a little care will supply 100% of our electrical needs.

Given I’m about to retire, internet becomes a “nice to have” vs. a “need to have”. The current speed seem adequate for our purposes as I can’t see how a faster internet would impact our lives, it’s reached the point of diminishing returns from my perspective.

The roads?  Coming from Massachusetts I don’t see the issue, the roads here are equally bad.

Sales tax, again coming from Taxachusetts it’s nothing new, not to mention my property taxes here dramatically higher.  I ended up suing the town of Edgartown, Massachusetts in tax court (and winning) because my property taxes had gone up 1000% (not a typo) in the 25 years since we built our summer house there.  Even after winning they remain 500% higher, still astronomical.

My point is that everywhere has its warts, I can give you a laundry list of issues about Edgartown, where my family have been property owners since the 1930’s, but I still love the place and community.  We will never sell that property and plan to will it to our children as we also hope to do with our St. Croix property.

It’s clear St. Croix (and the entire USVI) has some serious issues, and maybe a financial collapse is imminent but that might be the tough love that brings some positive change, only time will tell. In the mean time life goes on, the sun comes out and self reliance is our best bet. 

@jaldeborgh

You are where I was 22 years ago. I was 47 and just retired from Microsoft. I moved to paradise. I thought that I could insulate myself from the bad stuff. After an armed home invasion at 1:30am and the police killing two of the perps on my driveway, I realized that was not possible. After spending 4 months with no power after Irma-Maria, I realized that was not possible. If you think that solar will provide power after a Cat 5 hurricane then you had better have spare panels and equipment stashed away because most people had their solar systems blown away and it was impossible to get parts from off island. I had a 35kw generator which powered my house and two neighboring houses. It meant hauling diesel fuel for 4 months, and oil and filter changes every week.

Anyway, I love St Croix but decided that I was getting too old for this shit.

@Rotorhead  I'm jealous, retiring at 47, I will be 64 when I retire.  We will be seasonal residents so when that category 5 storm does happen, assuming that the solar system is knocked out, we will not be on the island until things are back on-line.  Our house was built in 1970 so it's seen it's fair share of wild storms and has held up remarkably well, that said I'm a realist so we'll see what the future holds.

Posted by: @rotorhead

I am sure the problems are all caused by racism. BLM to the rescue! A few riots, burn down the refinery then blame Trump for not sending more money down during the pandemic.

Whenever there is a problem it is always someone else's fault.

Guess it Sucks getting old.