At the outset of their term in office, Governor de Jongh and Lt. Governor Francis set out a number of goals to grow our economy and create economic opportunity for our people. They set out to increase cruise ship activity in St. Thomas and to bring cruise ships back to St. Croix. They looked to expand air service and the capacity among those airlines serving the Territory. They established strategies to build our rum industry and to support expanded hotel development. They moved to support our local contractors and other small businesses to make sure that they benefitted from the work that would be done. They laid the groundwork for our participation in the new clean energy and information technology industries. And they refocused our commitment to improving our infrastructure, to building roads, to repairing schools, and to making the full range of investments in professional development and information technology critical to our future.

Governor de Jongh's goal in all of these endeavors has been to broaden the base of our economy, to expand the breadth of opportunity, to build a future that was more diverse and resilient than the past. Tourism will remain the driver of our economy, but if we are to build real income growth and stability, we needed to do more, to become more than we have been.

However, the global economic crisis has had a great impact on our economy. It has devastated our government funds, where the Territory is running a monthly deficit of $25 million and our tax revenues fell by over 30%. This means that the government had $234 million fewer dollars to spend than the year before. To put this in perspective, $234 million is almost half of the cost of salaries and benefits of our Government workers for a full year.

Weathering the Economic Crisis

The economic crisis has certainly hampered our efforts, and the crisis has not yet passed. But because the Administration had already begun our work before the recession hit, the Virgin Islands has been able to continue to make steady progress at a time when so many governments in other areas of the country have cut back. Working together with members of the 27th and the 28th Legislatures, the Administration has solidified our rum industry and built new revenues without going into the pocketbooks of our residents. And thanks to the support of many in the Legislature, the new Captain Morgan distillery is emerging from the ground, and Cruzan Rum will remain Crucian as they move towards building the wastewater treatment facilities needed to expand their production and increase our revenues. 

Governor de Jongh and Lt. Governor Francis point with pride to these developments. They take pride because it is the rum industry strategy that was initiated three years ago – and their commitment to develop strong and durable revenue streams based on well-known consumer brands – that has provided a critical buffer of support as local taxes and revenues have suffered a steep decline. It is the rum agreements that have enabled government workers to stay on the job and on the payroll, to keep our government functioning. 

When you survey our region and the nation, from nearby Puerto Rico to states across the country, government workers are being sent home. Furloughs and lay-offs from teachers to police officers to clerks. Nearly every state in the country has enacted lay-offs, cut salaries or closed schools, recreational centers or senior citizen homes. To date, the Virgin Islands have done none of these things.

We have chosen to take a different path. Governor de Jongh and Lt. Governor Francis believe that to lay off government workers, cut critical social or public health services, or to raise taxes to attempt to compensate for our lost revenues would devastate our economy, and cripple our efforts. Instead, with the support and approval of the Legislature, borrowed $250 million was borrowed against these new revenues to give the Territory time, to bridge this difficult period, and to build a more diversified and solid foundation for economic growth when real growth returns once again to the United States and the world’s economies. 

This is not a step that was taken lightly, as in ordinary times one would not borrow against future revenues for operating purposes. But these are not ordinary times. 

In addition to enabling the government to avoid the layoffs of workers, the success of the rum industry initiative will mean hundreds of millions of dollars in new investment, economic activity for small businesses and their workers, and enable us to move ahead with long overdue capital projects. 

The Administration, working with the Legislature, has kept our government working. We have kept our people at work. And for that, Governor de Jongh and Lt. Governor Francis appreciate the work, and the courage, of each Senator who stood up and supported our efforts. 

The steps that the Administration has taken to keep our people working and to keep our economy moving, are critically important as we continue down the road to our new economy. Private initiative. Entrepreneurship. Building a knowledge-based economy. Integrating technology and connectivity into our future. 

All of these must become part of the future we build – a future at once diversified and resilient – but we cannot achieve that future if we do not keep the engines of our economy working today. 

We cannot build a future of opportunity tomorrow, if our people do not have hope today. Hope that we are building this new economy for them.

Support for Small Business

To support local businesses, the Administration initiated a small contractor’s bonding program, and underwrote the acquisition of tour buses by taxi drivers in the St. Croix district. At the Government Development Bank, the Administration initiated loan consolidations, reduced interest rates, and increased lines of credit for small businesses. 

For our farmers, the Economic Development Authority has made funding available for new equipment, and is working with our Energy Office to help reduce their energy costs through retrofitting and the installation of solar panels. 

Travel and Tourism

Through the unrelenting work of the Department of Tourism, and the rollout of the Virgin Island’s new branding campaign, more direct flights are coming into Henry E. Rohlsen Airport, where airlift has grown by 34% over the past year, while even in the face of the global recession, airlift into Cyril E. King Airport grew by 25%.

One of Governor de Jongh's commitments was to bring cruise ships back to St. Croix, while working to increased overall cruise ship traffic to the entire Territory. In the last three years the Administration has done so - reaffirming the Virgin Islands' position as the leading cruise destination when the world’s largest ship, the Oasis of the Seas, chose St. Thomas as its first port of call last year.

Federal Stimulus Funding

Through the Office of Economic Opportunity, and the efforts of agencies across the Territory, the Administration has used the strong relationships built up in Washington D.C. to take maximum advantage of the opportunity to fund a wide range of projects through the American Recovery and Reinvestment Act. 

To date, the Territory has applied for funding for over $400 million of projects, and received over $157 million in stimulus funding awards. These funds will support the General Fund at a time of severe revenue shortfalls. These funds will enable the government to expand workforce training, human services and education programs, and will provide funding for law enforcement, access to housing, energy efficiency, road improvements, bus shelters, and ferry boats, and to fund the critical work of many of our community’s non-profits whose work is so vital to so many citizens.

Creating Economic Opportunity

The de Jongh-Francis Administrations' commitment to economic development and job creation has been and remains unrelenting, and indeed economic development must be about more than just one company or one industry, but about how to build an economic future with opportunities for all Virgin Islanders.

On St. Croix, the expansion of the rum industry is just one part of the story. This year, the Administration used the new authority for issuing tax increment bonds and successfully raised millions of dollars to build the shopping center where we will soon welcome Home Depot to St. Croix. And that project is now moving ahead, putting more people to work. With a loan from GERS, Carambola Resort and Spa has avoided closing and is looking forward to a prosperous future and an alliance with a major international hotel brand. 

Additionally, three major hotel projects on St. Croix have obtained required governmental approvals to proceed to construction, and two resort projects on St. Thomas are set to move ahead. And, just as GERS has provided funding to Seaborne Airlines to expand its fleet of seaplanes connecting our islands, the central Government continues to provide operating subsidies to the ferry boats.

At the same time, the Administration is laying the groundwork for the innovation economy as interest and awareness the opportunities available through the University of the Virgin Islands Research and Technology Park increase, and as they begin to map our broadband assets and how best to ensure access across our community.