Pay cut for elected officials among belt-tightening measures
GIS - Tuesday, January 10th, 2012 at 11:17 AM
Cut in the pay package of elected officials is one of many cuts that will be used to significantly boost appropriations to the reserve fund, thereby paving the way for a stronger fiscal position, Premier and Minister of Finance Dr. the Honourable D. Orlando Smith has announced. * Photo: John Black
Monday, January 9 – Government has recently confirmed several initiatives to boost its reserve fund.
In speaking with the Department of Information and Public Relations, Premier and Minister of Finance Dr. the Honourable D. Orlando Smith, OBE said the cost cutting measures which will take the form of a 50-percent cut in performance increments in 2012, a 7-percent cut in operational expenses of individual ministries and departments, together with a cut in the pay package of elected officials. These cuts will be used to significantly boost appropriations to the reserve fund, thereby paving the way for a stronger fiscal position.
In providing background to the recent initiatives, the finance minister explained, “Government is now acting as a result of the current global economic climate, which has affected governments around the world in their ability to retain public officers and engage in public investment initiatives.”
This decision is also driven by the current state of the Government’s finances.
Honourable Smith added, “This Government has made a commitment to its public officers, and to the people of this country that no Government employee will be laid off as a result of cost cutting measures. And, true to form, we have made several decisions that allow us to retain our civil servants, while at the same time cutting costs significantly.”
He continued, “Government’s capital programme is also somewhat more conservative than in the past. Notwithstanding the cuts that are being made, we have still maintained a robust, yet conservative public investment programme while significantly boosting fiscal reserves for 2012 and beyond.”
The finance minister also reaffirmed Government’s commitment to responsibly managing the Territory’s fiscal affairs saying, “The people of this country have given the Government the responsibility to manage their fiscal affairs in a prudent manner and to prepare a future for their children.”
Premier Smith noted, “We take this commitment very seriously and the people of the Virgin Islands can rest assured that we will be doing everything in our power in the very near future to ensure this is the case.”
The Premier ended, “Our single most aim, in the interim, is to elevate the Virgin Islands to a position where our fiscal position is strong and we are able to meet the needs of our people efficiently and effectively. However, before we can address all the needs, we need to first do some housecleaning. We need to get our house in order. As a result of this, public officers are expected to maintain or improve on the quality of service they have provided in the past, but they will have fewer financial resources with which to do it.”
The cuts in both performance increments and operational expenses are consistent with Government’s agenda to improve fiscal management practices and reduce expenditure levels.
This article was posted in its entirety as received by bvinews.com. This media house does not correct any spelling or grammatical error within press releases and commentaries. The views expressed therein are not necessarily those of bvinews.com, its sponsors or advertisers.
49 Comments
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Let’s see Dr. rolled out his curative proposals and the heavy bitters have weighed in. And the story is that adjustment were long over due but the proposals are not bold enough. And they only scratch the surface. We took a few baby steps forward without negligible. Progress. Can we say that this was a lot noise about nothing. We took an aspirin but pain is still lurking. Just beneath the surface. Well!!
“performance increments” – is that the entire salary or just the salaries that are determined by performance rather than the salaries that are flat???
The best and most important point of this discussion is that no will be laidoff. But even Ray Charlles who is blind and deceased know that the properer action does little to address financial situation. Nothing bold here; no profile in courage. Bold action would have been sexy but it would been what the doctor ordered. Doc is threading lightly. This the problem with local politicians they act out of self-interest instead. Of doing what may be unpopular but is in the best interest of the country. Unfortunately, we will have to take additional addition to address the financial challenges either in this political cycle or the next. Surviving from one political to the next is good for the pol’s but in the peoples interest.
I would like to commend the Government on their decision and I am a proud Public Servant. I am of the opinion that increments should have been discontinued when they started the hiring freeze a while back.
I think Government was more than generous with just cutting it in half because if we followed the economic news of other countries both private and public sectors this would have been already addressed.
As such I offer the following contribution towards decreasing costs:
Civil servants should be glad it is only their increments that are being cut and NOT their salaries!
Second – I would recommend finding ways to increase revenues such as -
1. Increasing Land and Property Taxes.
2. Adding heavier Taxes Cigarettes and Alcohol.
3. Increasing Work Permit fees for positions that pay $50,000 plus annually.
4. Since Police have seemed to increase their Ticketing ensure that a system is linked with the DMV to ensure that all tickets are paid in full prior to licensing an individuals vehicle.
5. Ensure that Companies or Consultants tha tcome in to do work pay Taxes back into the country on all money earned prior to departure. I guess stipulations can be in place to waive this percentage if it is a crucial area.
6. Salries over $60,000 annually should be Taxed at a higher rate.
7. Address land ownership issues at certain banks for persons that make under $40,000 annually.
8. Fully utilize Public Servants in their area of study rather than just sticking them any where. Also ensure that all workers are productive and get rid of them if they are not. Reason being, some Public Servants get paid to do a job that they can’t and/or do not execute but get paid for it and make their departments and nthe entire Government look bad n the process.
9. Put a freeze on paying for Masters degrees even at a local level at that CMI program. If GOV paid for an officers Bachelors and Associates, I think its about time the officers come out of thier pockets. Nothing is wrong with educating your people but others should have an opportunity for a degree as well. A Masters is a luxury, some people just finish school and don’t try to put what they learn to use but instead GOV pays for them to go back without first ensuring that they actually got value for money.
10. Lastly, Government should invest into online classes for persons on study leave. This way they don’t have to pay out full salary, room and board, and all the other perks that come with it. At least if they explore this option individuals could still live at home and just be on paid leave while doing their studies. With the exception of some areas that must be learned on site such as medicine etc. This is providing that they issue study leave to immedeiate priority areas. I am also of the opinion that GOV study leave should be ceased unless it is an immediate priority area. This would allow for those that are already on leave to finish up and ensure that the youth that go through MEC are still afforded the opportunity to go to college. Because when these people are all finished schools there are NO jobs for them. This is proof that HR forecasting is definitely falling short, so Training and HR are not in sync.
This is actually some very good points here. To bad it wall fall on deaf ears
I agree with most of the points made. However, i must admit that high property and house tax are preventing many people in the USA from owning a decent home. Higher taxation after that heavy mortage and 50% cut in increments could be detrimental.
Wow! I am so imprssed with the 10 points that you have laid out here. I think that you should be a financial consultant to the Government. You could not have said it any better. You seem to be a very intelligent person. Hats off to you!
Claud and O.J are both makin three times what I make so why shouldn’t they take pay cuts too? My suggestion, cut their pay by $30, 000 each. Additionally, politician’s housing and entertainment allowances need to go too.
This is basically good news, but a 7% cut in expenditure is not enough to cover a 20% hole in the budget. So presumably the other 13% is going to come in the form of tax increases? Kudos to the Doc for having the courage to face reality, but there is more bad news yet to come I fear…
almost meaningless – HOW MUCH WILL WE SAVE in a year? Surely this is the key question?
They said $13mil. If they did nothing, you would say they did nothing, now they’re doing something, you’re saying they did nothing! I guess they should’ve fired 1000 people like the USVI did, that would’ve done the trick. Then you would say how evil the NDP was and you knew all along they wanted to lay off. All that bother you people is that you wanted these guys to fail and it’s not happening, now you don’t know how to deal with it.
You said they would lay off and you were confident. They will not, rather they will make certain cuts and boost in other areas. If you stopped going out for a Friday drink for 3months, you might probably save about $1200. Of course it won’t build you a house, but it can go a long way no? Hmm!!
people…ayo dont accept this unless oj and claude take a cut too
The world-wide economic downturn has a choke hold on the economy of all regional countries. Consequently, they all have to make structural adjustments. Look at the drastic action taken by the USVI.
In any situation or circumstance where expenses outpace revenues, some structural adjustments/cuts are taken to bring revenues and expenses in alignment.
Consequently, the proposed cuts will be painful but necessary. Cutting salaries, lowering increments and eliminating allowances are preferable initial action than layoffs. Many may criticize the action. But strong leaders do the right things, make the tough calls and let the chips fall where they may. A leader has to take action for the greater good
The governing cost has skyrocketed over the years and needs to be reduced. In any operation, labour is a major cost. But the public sector labour cost is much too high; approximately 48% of budget.
The proposed structural adjustments are window dressing and will do little to seriously address the issue. The adjustments only trim the outer edges with the core remaining untouched. These fixes are just band aids, a finger in the dike. Bolder and deeper long-term action is needed.
The governing philosophy must change. Government must adopt a doing more with less strategy while delivering a higher level of service. And as E. Leonard noted this should be the new normal. The whole governing needs a comprehensive overhaul, not a tune up.
The cuts may cause some civil servants, perhaps even the public, some distress. But they are need to keep the financial ship afloat.
I agree with your general assessment Storm. I believe what may be needed here in the long run is a smaller & more efficient government, which may unfortunately have to involve government layoffs. Such layoffs will be unpopular, and will be a dreaded decision for any politician if not political suicide. If they can achieve their goals without layoffs that will be good, but based upon what I have learned thus far, I am not sure these steps will be far reaching. But, I am prepared to be patient and await further information on the proposed cuts, and what other cost cutting measures may be in store as the devil lies in the details.
I share the concerns of other bloggers who allude to the perks government officials may be receiving.” Government Employee” points to some great examples. Those should be on the chopping block as well. I hope that more details will be revealed soon. In order to get the country back on her fiscal feet, there must be a shared sacrifice among all. Those who can afford to give up more should do so.
I agree with both you and Leonard’s accessment. As I have stated in my initial post, these belt tightening measures are a good first step. However, there may very well be a need for further steps and even a new way of running the government as it’s highly unlikely the proposed cost cutting measures will be sufficient. Nevertheless, for now, I would rather see people maintain their jobs even if they make less so that they can take care of their families.
True the nature of politics drive politics to play it safe. But the long-term interest of the country should trump the self-interest of politicians. All the parties play this survival game. However, the country is at a crossroad and need bold, heavy lifting to move it forward.
And given your grasp of the art of politics, I’m confident that you will agree that these proposals are low hanging fruit and will not put country on a strong and sustain footing. History have demonstrated that for floundering businesses to transform themselves into successful businesses required bold and sacrificing action;some pain was needed for the transformation.
And like these transformed businesses, the BVI need bold action. This course of action may leave some casualties in its wake but it is what the ailing country needs to heal.
Our politicians need to be true statesmen and do the right things and not just doing thing right. But I’m will not hold my breath, for ego, power, and status will rule the day.
In any event based on the current course of action, we unfortunately will be discussing this issue in 2011 and beyond.If we are betting that when the US and European economies improved, our economy will be in lockstep with them. But there will be lag in our economy improving.
Nonetheless, this economic downturn has demonstrated clearly that our economy is vulnerable to external shocks. As such we need to move aggressively to sustain and improve the twin pillars and diversifying our economy. We are behind the 8-ball in diversifying our economy.
We lack the trained local workforce, the infrastructure, health care facilities, law and order, and other social infrastructure to compete globally for external investment.
No argument here storm. You are on point.
Although I applaud cost cutting measures and the recognition to do so, I do not agree with cuttuing increments of the worker. We all know of the housing allowances and all the little bonuses the elected officials receive. These ALL should be cut immediately. Pay for your own mortgage and show up at the office! Pay for your own car. And no one should be flying first class anywhere but the Premier. You were elected for the people then represent the people and that means doing it because you love it and want to help; not for the perks.
Also, the contract to Vance makes sense as he has some expertise in the area but in no way should Cline be considered an expert or a consultant. We are not idiots. It’s a favor done for a political friend. He lost! No one wanted him, so paying him large dollars when people lose increments who earn a third of his contract is not going to win any votes. Run the government properly, not like an elitist group.
Who in their right mind would run for office, be on call 24 hours a day, have to deal with all the pettyness, hatred, backstabbing, name calling, favour hunting that goes with the job and then get paid 40/50 or 60k a year? In the scheme of things our politicians really are not paid much at all.
Are you suggesting that they get a pay raise? I can tell you this much, I deal with many of those same issues and I don’t come close to getting the kind of money they get.
I hope they will now carry up the 10,000 goes up to 15,000 because by time I get the break it is only for 2 1/2 months.
“The people are always impressed by the superficial appearance of things….The Prince(Government)should, at fitting times of the year,keep the people occupied and distracted with FESTIVITIES and SPECTACLES. Machiavelli
Most if not all of these elected members are already established in their societies…they have buisnesses etc…I have nothing I work my %$# off last year and I am expecting my increment…so my child and I can live a little better this year. Its a good move but really hurts guess I have to look another Job…Just saying…Lord just help me to get what I worked hard for…by law can they do this? Guess so!!!!!
It hurts when the two Gentlemen (who were not elected) going home with $90,000.00+ just to consult. Why can’t they make do with $60,000 or $65,000? Even in hard times the rich continue to get richer.
It only hurts because you’re not making it. Get educated, get experienced, get with the program and you too could make good money! What do you mean “Why can’t they make out with $60k? What kind of stupidness is that? Get mad at the thousands of civil servants who report to work each day, leave at 9:30 to do their side job, come back at 4:15 to tell everyone good night, and leave at 4:30, that’s what’s killing us! If the people in the service pulled their weight there would be no need for hiring consultants.
When you are elected, you have 4yrs to keep promises. You put people in position who you think will carry out your agenda swiftly and properly. Not a set of dead weight always on internet, phone, always sick and wilfully holding up progress and leaking information. Hate it all you want, but that’s life, if you want things done how you want, you put WHO YOU WANT and pay them WHAT THEY WANT!!! REal! Everybody has their price, you want me on the job, PAY ME MY WORTH! SIMPLE!
Real Talk, You are right on the money. Blessings!
when you going to stop justifing s#it?
It is truly a good thing that the people spoke so loudly and put former legislator Flax out of the house! Can you imagine his reaction!
This is all VIP fault they like a kid in candy shop with $20.00 spend recklessly Fraser pay need docking for all that illegal ish he was doing
They talking about cutting increments etc for those who been there but years but at teh same time they hiring consultants (all their friends and party members) left and right like they crazy with annual salaries over $96,000. I say they start by cutting out the consultants. Ever here the saying last hired , first fired!!!!!!!!!!!!!!!!!!!
Control the maases with fear!
I am not pleased about the 50% cut but it is better than getting send home like the gov’t employes in St. Thomas. I rather take an increment cut than lose my job.
But I think that they need to stop giving out house, vehicle, entertainment and telephone allowances. That will save the government over $100,000.00.
Also they need to stop driving the gov’t vehicle after hours and stop burning the ac to conserve gas. There are alot of positions that are not necessary in government.
A next thing they should do is build another Administration Complex and stop paying these high a– rent. Government departments scattered all over and that shouldn’t be. It would be more cost efficient instead of paying over $50,000 monthly in rent,they could pay $4,000.00 for the commercial loan.
I know NDP bloggers will try to justify every move the NDP makes whether wrong or right but it ain’t going to be so simple this time. Cutting cost is good but giving back to friends and family is ridiculous & that’s what the NDP is doing.
Well VIP has been given back to their supporters for years its called RENTED OFFICE SPACE for governmetn offices anywhere from $25,000 to $35,000 a month in some cases. How about we cut those????
find out what year those buildings were rented and who was in power then, you’ll be surprised
Majority of THOSE buildings were rented long before NDP lil 4 year term prior to them being in now you hush you a$$….This 18 F’ing years plus VIP been in and we were in those buildings before 2002.
ndp rented alvin’s building for a whopping hefty price and didn’t use it for years…remember?
well i do hope they cut that housing allowance they get. i dont really understan that $2000 to live in your owned home. also it time enough for gov to control all those vehicles they have on the road. fuel is expensive. why dont they create a car pool so those cars can park at 5pm. every day and on weeken?
This is necessary, and a good step to saving the greater masses from losing their jobs. I would have sent home some of those non productive employees, but so be it. Jobs are hard to come by and people still have to live. GO NDP!!
The govt. full of ….If they would stop giving out those htgh contract and opening jobs for Skelton and Kevin, we will be in a more suitable position to keep motivating civil servants with incentives.
Imagine we work for that 100% since last year and now they telling me i can’t get it and still they want me to perform at my best Hmm and before i forget school children say that $150,000 contract given out to wifey help cut my dam pay and i mad!
THe civil service is in a mess. Some may have worked and performed for that 100% but certainly NOT MOST
If the minority performs then the service is being runned on the minority. So lets see, send the set who are not working home keep the working few and lets all live happy. Think of the money we will save. Every year we curse the majority for not producing yet we dont send them home. So who is actually wasting money?? People open your eyes The System Needs To Change!! Not the parts!!
When the VIP was giving contract after contract to Carvin Malone, where were you? When raja smith was getting contract after contract from Fraser, where were you? When Andrew give his fact cat friends contract after contract for questionable things, where were you? Where were you when we paid 550k for study for medical schools? Where were you when Bevis got that ridiculous contract that ended up costing 400k instead of the 94k that we were told. You want me to carry on? Keep off the NDP. The country voted them in to save the country from the shite the VIP was doing.
You try get your information straight because what you saying about Fraser & Andrew makes good gossip talk but the days of side tracking us with gossip is over.I don’t mind the cuts but giving the money right back to Claude, OJ, Lorna, Shania, Vance in big consultancy contracts & the list goes on, while telling us that we broke & we have to cut back is not right. Better I join the NDP & run for election and loose. I will be better off financially!These actions is what I struupsing about!
With NDP, we are still saving. Those contracts are being transferred from people like Ray G. etc. The money for Claude, OJ, Lorna, Shania and Vance still does not add up to some of those huge contracts issued for consultancy by VIP. Not in a dream!!
I hope that you have proof for a fact that the first lady gets $150K. I know for a fact that she has collected $0 for all the services performed thus far. I think that is highly commendable. She wants the country of move forward and the government of the day!
Do you know how much Ray George was making with he was contracted to work with Fraser. Well, Claude is only replacing him.
You are probably one of those that under perform and here making the most noise. The government trying to avoid sending a few people home, and you here talking crap. What if you keep your 100% increment and we send home 2 or 3 of your co-workers??? How would they and their families feel?? Think before you blog please. At least you getting something, things could be worse!
In tough, challenging economic times, both the public and private sectors normally only have two structural adjustment choices: cutting expenses or raising revenues. And more often than cutting expenses is the prime option. But the cuts are normally personnel cuts on the backs of the rank and file.
As such it encouraging to see that Premier and other elected officials leading by example and from the front by sharing the financial strain, sacrifice, and pain.
Doing more with less and delivering the same or a higher level customer service is a common expectation in private businesses, as well as in government. This governing philosophy is the new normal. It is easy to effectively lead, manage, and supervise when an organization is flushed with financial and other resources. But a better gauge of managers skill and effectiveness is their performance during lean times.
Low productivity comes with a huge price tag and improving it presents a great opportunity to lower governing cost and delivering a higher level of service. Additionally, ministries must embark on a mission to improve work processes, demand responsibility and accountability, improve effectiveness, improve customer service; root out inefficiencies, duplication, and waste….etc. They need to provide best value services at the least cost—bend the cost curve.
It’s belt tightening time. These cost cutting measures are a necessary, wise, and prudent step given the financial status of the territory. I am happy that civil servants will not be losing their jobs. I am sure they will be happy with this.
It would have been nice to know what exactly those “cuts in the pay package of elected officials” would look like. At any rate, this is a very good first step. Hopefully, the intended goal of these measures will be realized in time.
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