With $94 million in cash on hand — or roughly 25 days of government operations —compared to just $38 million at this time last year, members of Gov. Albert Bryan Jr.’s financial team struck a cautiously optimistic tone Tuesday as they opened the Legislature’s annual summer budget hearings.
Testifying before the Senate Committee on Budget, Appropriations and Finance, the team presented a snapshot of improved liquidity, increased revenue collections, and continued federal support, but warned of underlying vulnerabilities driven by overtime costs, federal grant slowdowns, and a growing backlog of unpaid vendor invoices.
The administration’s proposed fiscal year 2026 executive budget totals $1.76 billion, comprising $936.4 million from the General Fund, $691.9 million in federal funds, $68.8 million in other appropriated funds, and $62.6 million in non-appropriated funds. The plan was submitted to the Legislature on May 30, just ahead of the constitutional deadline.
Office of Management and Budget Director Julio Rhymer Sr. said the proposal was built using conservative estimates, prioritizing fiscal discipline while trying to preserve critical services. “We are in a better cash position than we were a year ago,” Rhymer told senators. “We’ve taken measures to strengthen collections, reduce receivables, and apply caution to our projections. But the challenges ahead remain real and complex.”
Finance Commissioner Kevin McCurdy said the $94 million on hand includes $59.7 million in the General Fund and $15.3 million in Special Funds. But he cautioned that even with improvements, the territory remains vulnerable to external shocks and internal cost drivers. “We are doing better, but we’re not yet comfortable,” McCurdy said. “Cash flow must still be managed carefully, especially given the volume of outstanding obligations.”
Among the most pressing concerns: $30.5 million in unpaid vendor payments, of which $23.5 million is General Fund-related. “These are not just numbers,” said Sen. Dwayne DeGraff. “We’re talking about real people, small businesses, nonprofits, and contractors who are waiting to be paid. We have to fix this.”
McCurdy said the administration is working aggressively to improve internal controls and oversight, including through regular meetings with agency chief financial officers and enhanced tracking of spending against allotments. “That effort has already helped us flag overspending before it becomes a crisis,” he said.
Revenue Forecasts Improve, But Grant Flow Slows
The FY 2026 revenue forecast shows modest year-over-year growth, particularly in consumption-based categories. General Fund revenues are projected to increase 7.7%, from $864.1 million in FY 2025 to $936.4 million in FY 2026.
According to Rhymer, key drivers of this growth include:
Gross Receipts Tax: projected to increase from $213.8 million to $220.2 million, with a potential 14% boost if disaster recovery projects pick up pace;
Excise Tax: expected to grow by 1.5%, reaching $37 million;
Real Property Tax: estimated at $65.6 million, a 2.5% increase over last year. Tax Assessor Brent Leerdam testified that this year’s goal for delinquent and current collections is $31 million each, while roughly $9 million in delinquencies has been collected year to date;
Individual Income Tax: forecast to decline by 2%, from $423.4 million to $414.1 million; and
Corporate Income Tax: expected to fall by 5%, from $78.8 million to $74.8 million.
Officials also emphasized the growing fiscal impact of disaster recovery projects, which have generated $22 million in gross receipts taxes so far this year and are expected to yield $48.9 million in FY 2026.
Federal funding remains a major source of support, with over $20.6 billion in total grant funding potentially available to the Virgin Islands. However, federal grant drawdowns have slowed, with Rhymer citing new executive orders, more restrictive reimbursement timelines, and shorter grant periods as key hurdles. “We are navigating a much more complex federal landscape,” he said, noting that some agencies have seen reimbursements delayed despite submitting requests on time.
Workforce Growth and Rising Costs Spark Concern
Lawmakers also focused on personnel and operating expenses, which continue to climb. The Bryan administration has processed 2,362 personnel actions this fiscal year, including 221 new hires and 225 separations. The central government now employs 5,887 workers, while the total government headcount — including semiautonomous agencies — stands at 10,008.
In the face of rising payroll costs, lawmakers touched briefly throughout the hearing on recently implemented executive pay increases, though Personnel Director Cindy Richardson testified that no NOPAs (Notices of Personnel Action) have been processed for salary increases outside of the governor and lieutenant governor. Any other changes, she said, were tied to step increases, reclassifications, or the completion of probation periods.
Her statement comes against the backdrop of recent public scrutiny over the top-level pay hikes. In January, the Bryan administration implemented raises for cabinet officials based on the recommendations of the Virgin Islands Public Officials Compensation Commission. Because, Bryan said, the Senate took no action within 90 days of receiving the report, the raises authorized under Act 8384 took effect automatically. The governor’s salary rose from $150,000 to $192,000, and the lieutenant governor’s from $125,000 to $168,000.
During Tuesday’s hearing, Sen. Kurt Vialet took issue with what he described as excessive increases in executive salaries, pointing specifically to the recent appointment of Haldane Davies as director of the Bureau of Economic Research. Davies, who previously chaired the Compensation Commission that recommended the raises, is now making $125,000, up from the $95,000 earned by his predecessor. “How do you justify that kind of increase for the same position?” Vialet asked. “Especially when we’re asking every other agency to tighten their belts?”
Beyond salaries, senators also zeroed in on ballooning overtime costs, which have already reached $21.4 million this year, with nearly half concentrated in the departments of Health and Human Services. Health insurance contributions have also increased, reaching $226.1 million for FY 2025, up from $206.2 million the previous year. Although employees are expected to contribute 35% toward their premiums, they are currently paying about 27%, officials said.
Committee Chair Sen. Novelle Francis Jr. said these spending trends raise important questions about long-term sustainability. “We’ve improved our cash position, and that’s a good thing,” he said. “But we’re still overextending ourselves in key areas. That’s not sustainable without greater control.”
Vialet requested a detailed workforce report by June 14, including a breakdown of new hires by agency, position, and funding source. “We can’t keep hiring without a plan,” he said. “We need to understand where these employees are going and whether we can afford to keep them long-term.”
Sen. Kenneth Gittens called for greater transparency, urging departments to show not just where the money goes, but how it’s being used. “We’re looking for results. If you’re asking for more, you need to demonstrate impact,” he said.
