USVI Senate panel backs FY2027 budget as tax revenues slip

The US Virgin Islands Senate Budget Committee gave the green light Monday to nearly 30 appropriations bills that together form the territorial government's operating budget for the 2027 fiscal year.

The package emerged from 21 hearings conducted in July and August, during which lawmakers reviewed agency finances and operational requirements. Committee Chairman Novelle E. Francis Jr. characterised the budget as cautious, reflecting broader economic uncertainty.

"In light of the ongoing factors affecting the global and national economies, we are underestimating the government's anticipated revenues while being brutally honest about all projected revenues and expenses," Francis said.

The approved measures cover appropriations for the University of the Virgin Islands, the Hospital and Health Facilities Corporation, the Judicial Branch, the Legislature and numerous executive departments. The Legislature itself received $26.1 million. Capital improvement allocations of $5 million were split among St. Thomas, St. Croix and St. John.

Warning signs in revenue figures

Francis drew attention to troubling trends in government finances. Tax collections dropped from $793.1 million in fiscal 2025 to $783 million in fiscal 2026, a $10 million decrease. Individual income tax revenue fell particularly sharply, declining $31.7 million or 7.3%, from $434.7 million to $403 million.

Operating income contracted from $839.1 million to $823.1 million across the same span, though total revenues edged up to $911.4 million. Francis attributed that modest gain to the territory drawing on its line of credit rather than genuine revenue growth.

"I think that the state of our finances is precarious, and I say precarious because we still have a lot of unknowns as it pertains to the federal funding through HUD and FEMA," Francis said.

Sen. Kurt Vialet flagged risks around revenue collection, especially through federally funded projects managed by the Office of Disaster Recovery. He pressed the incoming administration to accelerate those projects so the government can recover the funds needed to sustain the budget.

Sen. Clifford Joseph Sr. urged the new administration to fill vacant positions across government, pointing to more than 32 unfilled roles in the Office of the Lieutenant Governor alone, many in revenue collection functions.

The bills advance next to the Committee on Rules and Judiciary before a full Senate vote scheduled for Friday.