Our economy is changing and we should change with it. We are seeing the marketing and commercialism of tourism as the vehicle for our economy and future development. Major resorts, condos, vacation villas, real estate markets, and businesses designed to cater and appeal to tourists are increasing constantly. Our planners and government leaders are re-zoning our islands in an effort to expand this market. Such tourism-generating businesses are becoming more profitable, especially when our tourists are treated as “guests.” However, one sector of our community has become a victim of this economic surge — the residential property owner. To protect our homes, our families, and our green spaces, I urge that we consider the elimination of residential property taxes.
How could we ever do a thing like that? Well, within our nearly $900 million annual budget we see that our residential property taxes contributes less than $20 million per year. Although it is hard to get an accurate figure of this tax as our system is mystically designed to confuse financial figures, this figure of $20 million seems close to the actual amount as the total amount of all property taxes is $79 million.
The residential property tax is our islands’ most contentious tax, and especially for St. John, which has seen our taxes skyrocket due to tourist businesses, vacation villas, condos, EDC benefits for some, and re-zonings. We are seeing our residents trying to survive the economic engine rolling over them. We have seen a modest home, surrounded by vacation villas, suddenly have an evaluation six times higher. Our native community, our residential community, and our working families are simply trying to survive while tourism and real estate prices blow up the evaluations of their property. Even the cost of sewage and trash is accelerating due to our tourism impacts. I believe we need to shift the tax burden onto those who are profiting in the business of marketing and developing our islands.
How could we “eliminate residential property taxes” without harming our economy? I believe that the opposite would ring true — we are harming our economy by having those in the tourism game pushing our residents out of their homes and land. Eliminating this tax would protect our communities and make our residents partners in our islands’ future. Instead of viewing the visitors as invaders, our residents would see the fruits of the economy which will enhance the tourism package for the Virgin Islands.
How would we make up the financial “shortfall” from not having the residential property tax contributions? There could be a variety of methods from a commercial tax, a tourism tax, an extra tax on real estate developments, oh, and the best — to have our government leaders tighten our belts and to bring an end to corporate welfare. Our EDC program should be designed better to provide a “leg up,” not a lifelong “hand out.” If any residential home is used as a vacation villa or long term rental, then it would be assessed with a commercial property tax, verified by a business license. Using such creative techniques, eliminating the residential property tax should not hurt our economy. Also, with this tax savings for residents, home finances will be spent to improve the home and the quality of life of our families, which is another economic engine for our islands.
It is time in the Virgin Islands that we look at the whole economic picture. Too often we are simply taxing and spending without a plan for the future. Too often we see our government funding pet projects and events without a plan. This “shooting from the hip” mentality rarely helps our islands and too often keeps us in the back room of economic success. Anyway, it is so wrong that our homes are burdened by the popularity of tourism and commercial profits instead of being partners in success. One thing is for sure, extinction of our residential communities by higher and higher property taxes will eventually become a catastrophe for our islands.