In this series, the Source introduced the community to the platforms of the candidates for governor and gauged their approaches to issues in the territory. The Source sent each gubernatorial team a set of questions this summer and ran the answers in the order in which each candidate responded. The Source invites comments on these articles, in the hopes of creating a dialogue among voters. This story covers all of the candidates’ answers to the second and third questions to allow for easy comparison. The answers below are ordered per the ballot position of each candidate.
Question 2: Many young Virgin Islanders are seeking educational and financial opportunity outside of the territory. What plans will you execute to encourage those who remain to stay, and to get those who have left to return?
Question 3: What would you propose to address the collapse of GERS in light of the $3 billion-plus shortfall and projected exhaustion of all funds between 2020 and 2023?
1 – Kenneth E. Mapp
Brain drain: This is one of the many areas where the Mapp-Potter Administration (his running mate is Osbert Potter) is rapidly moving forward. Earlier this year, I issued executive orders increasing starting salaries by about 30 percent for teachers, law enforcement officers, firefighters, social workers and other public sector employees. This has already helped us recruit and retain more of our best and brightest. We have engaged in social media advertising campaigns to reach out to Virgin Islanders living outside the territory regarding employment here at home. We have also worked to create new jobs in the private sector, including opportunities related to the refinery, tourism and construction. We will keep more of our talented young people here in the territory for college and beyond through the new University of the Virgin Islands tuition scholarship program, where any graduate from a Virgin Islands high school is eligible to apply for free tuition to earn a bachelor’s degree with the requirement they remain working in the territory for two years after graduation.
To address dislocation of workers, in September we received a $4,997,845 grant from the U.S. Department of Labor for a Dislocated Workers Grant which will provide training and address the re-employment needs of individuals who lost their jobs due to the impact of the hurricanes.
GERS: We have designated for GERS half of all profits from the new refinery operations and have proposed numerous other reforms and new revenue generating and profit sharing initiatives that would inject millions into the system. $25 million dollars from Phase II of the refinery agreement will go to GERS as a down payment for the purchase of the Havensight Mall and the Port of Sale lease and we will enter into an eight percent mortgage with GERS for the balance of the cost, estimated to be about $15 million. The mall is appraised between $41 to 42 million and this mortgage will be paid over a 10-year period, providing interest to the system. WICO will manage the property and we will enter into an agreement with one of our cruise partners to rebrand and develop the mall to its fullest potential. Fifty percent of the net revenues generated at the mall, in perpetuity, will go directly to GERS while $10 million from Phase I of the refinery closing payment will be loaned to IGY to help finance a 110-room hotel at the Yacht Haven Grande property. That money gains 5.75 percent interest per year. Five percent of the hotel’s gross revenues will go to GERS and seven percent – if the hotel is sold – will go to GERS. However, it requires changes to our laws for the comprehensive reforms necessary and, to date, the Legislature has not enacted the measures we have proposed nor introduced any of its own. Experts say the refinery revenues alone would extend the life of GERS by five years and that the Mapp-Potter Administration is the first to support a plan that would enhance GERS’ solvency at that level.
2 – Adlah “Foncie” Donastorg
Mr. Donastorg did not supply answers to What The Candidates Say questions.
Brain drain: As a mother of two sons who were born and raised in the Virgin Islands and went away to college, Soraya too wants her sons to return home and contribute to our community. In order to encourage them and others like them to return home, we need to improve the quality of life in the Virgin Islands.
We all know the challenges: lack of specialized higher education, high crime rate, extremely high cost of living, roads in disrepair, and unreliable electricity, to name a few.
When Soraya returned home after graduating from law school, the economy was booming and there was hope for me to earn a good living as an attorney. Dwight (Coffelt’s running mate, Dwight Nicholson) followed the same path and came home after obtaining his engineering degree and developing professional skills in the states. It was our profound love for the Virgin Islands and a thriving economy that brought us both back. Our children will return too.
To stop the migration and start rebuilding the population, we need to put the VI FIRST plan into effect. We should not stop our youth from exploring the world beyond the Virgin Islands, but we can make it a place they want to return to raise a family in a community surrounded by history, culture, temperate weather and turquoise waters.
We always want to attract the Sorayas and Dwights who left to obtain their education and professional experience.
GERS: Soraya attended both town hall meetings that GERS held in February, 2018 on St. Thomas and on St. Croix. She heard the information offered by all representatives on behalf of GERS as well as the many questions posed by the people present. GERS offered various options and recommendations, including but not limited to:
a. Reduce Tier 1 benefits by 30 percent;
b. Impose a sales tax dedicated to GERS; and
c. Reduce legislative and judicial benefits to 70 percent of Tier 1 benefits.
What we need is a current dollar figure attached to each recommendation as to the benefits to be derived and these dollar figures can be calculated by the actuaries retained by GERS. We will not know which is the best recommendation or group of recommendations until we know the dollar figure that each will bring to the system.
Soraya also read the Mercer study of the GERS system dated October 26, 2016. This study was commissioned by the governor and paid through PFA. The study confirms many of the options and recommendations made by GERS and adds another one – to reduce the administrative costs of GERS itself. Importantly, at page 13, it states: “Every dollar spent on administrative (non-investment) costs is a dollar that cannot be used for benefits.” This study noted that as of FYE 9/30/15, GERS had administrative costs of $16.5 million while Guam, which has a comparable system, had costs of $4.5 million. However, the study further noted that lowering administrative costs in and of itself will not make our system solvent. It is clear that administrative costs must be adjusted so that additional monies are saved and used for benefits.
Once we know the current dollar figures of each recommendation, we can make a better, informed decision as to how we can best proceed. We would make that decision available to the public and have town hall meetings to discuss our recommendations. We would also support a referendum on the issue. It is imperative that we do all that we can to resolve the pending challenges at GERS as its insolvency will directly affect every segment of our population:
– Current government employees
– Retired beneficiaries of the plan
– Taxpayers living in the territory
– Visitors who make a purchases in the territory, and
– Indirectly affect everyone by resulting in a further drag on the economy.
Loss of benefits means less dollars circulating in the economy by retirees. Taxpayers already burdened and may leave the Territory”
Brain drain: It is the economy that causes many young Virgin Islanders to leave. The Millin Young – Bengoa (Millin Young’s running mate is Edgar Bengoa) administration has the experience, both in the private and public sectors, to aggressively expand the economy.
We will partner with the V.I. Department of Labor, V.I. Bureau of Economic Statistics, V.I. Economic Development Authority and the local business community to assess the workforce needs and adjust the training needs to fill the available jobs with local talent. In addition, many Virgin Islanders seek home ownership, good schools for their children and excellent health care facilities. We will work tirelessly to expand home ownership, resolve property tax inequities (especially on St. John) and create a new public school system.
Our administration will work with our educational system to restructure the curriculum and bring it up to level of states that are succeeding. We will provide an equal opportunity for our students to be as competitive. As a business owner and member of the chamber, my lieutenant governor candidate believes, as I do, that the challenge is upon us to make first steps by educating our young people regarding the opportunities for learning what our companies do as well as what that means for them in the future by introducing them to practical roles via internships, apprenticeships and work study programs.
We also believe a strong technology cluster of growing companies offering hope of growth in the territory as well as the extension of our fiber and telecommunications, health and stronger transparent government will initially create remote job workers and perhaps then the return of Virgin Islanders who realize they can make a living here for themselves and their families.
GERS: The greatest error that the present administration made is to dismiss the GERS crisis and literally tell the GERS Board to “pack a lunch.” Two immediate steps that the Millin Young – Bengoa Administration would take is to simply nominate new board members to fill vacancies and/or expired seats. Second, we would implement the law and pay both the required pension deductions every month. The current administration has failed to do so. The recent proposal is at best a partial fix. The system has at its disposal top-rated fund managers and professionals with actuarial experience that are well regarded in the financial markets and well paid. Their advice is worth considering and not easily dismissed as in the past.
5 – Albert Bryan
Brain drain: We have to create economic opportunities for our young people that are comparable to those available elsewhere. We must provide them with meaningful career opportunities. We can start by amending the law to require EDC companies to provide quality jobs. The compliance rules for companies seeking new Economic Development Commission benefits should be amended to only count full-time jobs that pay a livable wage, offer health insurance, retirement benefits, and paid sick leave towards meeting the employment requirements.
For those young people who are interested in starting businesses, the local Small Business Development Agency must be empowered and staffed to provide active and ongoing support to home-grown entrepreneurs and local start-ups. This includes support for companies that want to expand themselves within the Virgin Islands or regionally. True support for local small businesses includes addressing workforce concerns, expanding access to capital, reducing operating expenses resulting from burdensome fees and taxes, and improving the effectiveness of economic incentives.
It is also important that we expand the availability of affordable homes. Homeownership should be an attainable goal for all young Virgin Islanders. The Housing Trust Fund needs to be provided with a sustainable and adequate source of funding so that it can fulfill its purpose of supporting affordable housing development in the territory.
GERS: The only way to save the GERS pension plan is to infuse a large amount of capital before the system becomes completely insolvent. The system will not be able to generate sufficient investment returns without it and the amount increases significantly for each month that we delay. Unfortunately, the Government of the Virgin Islands is unable to float bonds to raise this capital at a reasonable cost and is currently unable to generate sufficient surplus revenues to dedicate to this purpose. The Bryan/Roach plan calls for freezing the system from new entries. An actuarially determined required annual contribution will be budgeted for in order to preserve the retirement benefits of vested workers and retirees. Non-vested workers and new employees will be placed into a new plan that is a hybrid defined benefit/defined contribution plan. Pursuing new sources of revenue would generate the necessary infusion of capital. There are three potentially lucrative areas that we will pursue in this regard: expansion of rum exports, intellectual rights on cannabis research for pharmaceutical products, and hosting of internet gaming sites.
Brain drain: Executing a sustainable strategy to encourage young Virgin Islanders to remain in or return to the territory is imperative for the future growth and development of Virgin Islands. For this reason, it is an integral component of the Smith-Frederick (Smith’s running mate is Hubert Frederick) strategic approach to making the Virgin Islands global leader in the Caribbean and beyond.
Among the many areas of immediate concern, many young Virgin Islanders have indicated that (1) mitigating the high cost of tuition to attend college or technical school; (2) creating career and advancement opportunities; (3) providing technical assistance and opportunities to help them access financing to start businesses; (4) providing support and opportunity for them to access affordable housing; (5) access to the performing arts and consistent nightlife; and above all else, (6) providing them with opportunities to access affordable, high quality comprehensive preventative health care are top priority areas of immediate concern for young Virgin Islanders.
To address the ongoing brain drain of young talent from the territory to other jurisdictions abroad, the Smith-Frederick Administration will provide a free community college for Virgin Islands residents for the first two years at the University of the Virgin Islands (UVI) towards an associate degree, bachelor degree or a certification program in a vocational field. We will establish a sustainable funding source, along with performance measures and corresponding service requirement upon graduation.
GERS: The Government Employees Retirement System (GERS) is in immediate peril. The Smith-Frederick Administration commits to exploring all options to ensure that the government complies with its obligations to the Government Employees Retirement System (GERS) as a plan sponsor, including payment of employer contributions and employee withholdings.
Notwithstanding the government’s responsibility to comply with the obligations to the GERS based on the current plan design, the Smith-Frederick Administration strongly believes that the GERS, as currently structured, is not sustainable moving forward.
It is our position that the GERS must transition from its current plan design to a plan design similar to a 401K-type plan. This transition must ensure that the benefits to existing retirees are secure.
We will work closely, in good faith, with all stakeholders, especially the GERS membership and the Legislature to address this, with the understanding that time is of the essence.
7 – Warren Mosler
Brain drain: Our policies will result in an expanding private sector that will require those types of well educated people.
GERS: *Contribute the authorized but not issued $600 million of rum carry over bonds directly to the GERS.
*Offer retirees the option of getting their money back lump sum payments <equal to half the actuarial value of their account>.
*The combination of these two ends the crisis when recognizing the reported unfunded liability is grossly overstated as we get to keep our own income taxes. This reduces the net unfunded liability from $3 billion to about $2 billion.
Original Source: https://stjohnsource.com/2018/10/28/what-the-candidates-say-how-can-the-territory-avoid-brain-drain-what-will-you-do-about-gers/