The Virgin Islands Daily News published two stories last week that have been gnawing at me. They were headlined, OMB chief projects V.I. revenue will increase $26 million and, a day later, DeJongh submits $15.3 million supplemental spending bill.
Debra Gottlieb, the director of the Office and Management and Budget, told the Senate Finance Committee that "anticipated increases in real property tax collections based on newly assessed values" are the reason. And even before any Senators had sniffed the smell of new money, the Governor came in on top of them to propose new ways to spend it. When the initial property re-revaluation numbers came out, I waited for Senators to put 2 and 2 together. The Governor beat them to it.
Now, thanks to the unbelievable increases in St. John real estate assessments, and with property owners unsure only of how high their new taxes will be, it appears the government is eagerly waiting to see the trough filled.
I don’t think it’s unreasonable for corrections officers to get long-delayed overtime payments, or for firefighters and supervisors to receive their also long-delayed raises and to pay other personnel and health services costs. These bills were way overdue.
What could this mean to you? Real estate taxes are part of a busines’s operating costs – doesn’t matter whether it’s a restaurant, a gift shop, or … a hardware store, a supermarket, a fruit stand, a timeshare development or …. dare I say … a villa.
It’s simple mathematics. If a villa, condo, resort or timeshare has been socked with a 500% higher assessment, the owner knows real estate taxes are going to up. What do we know about business costs? "Business" doesn’t pay them. The consumer does.
This is why every vacationer and visitor to St. John has a stake in the revaluation process of properties on St. John. Bottom line advice: book your next villa stay asap.
If the villa I planned to rent in Stj goes up for instance 500% plus – I being the consumer can always go to another destination! The poor Stj tax payer does not have a choice.
While I agree that initially, the villa-renting vacationer will be relied on to cover the increase in real estate taxes, ultimately a correction in real estate values will be the long range outcome as tourists who are unable to afford the higher cost of vacationing in St. John go elsewhere.
A part of me though is withholding sympathy for the property owners on St. John. For countless years the real estate on St. John has been woefully under-assessed and property owners have had the luxury of paying only a fraction of the taxes that would have been due had the real estate values been fairly and accurately assessed. Of course no one is going to go crying to the government when they’re underpaying taxes.
And will St John, providing the bulk of this windfall, receive a slightly proportionate pay back in services, infrastructure, police & teachers?
If any?
Or will this only serve to help pay for more mis-spending, a bloated government payroll & inefficiency?
The only one who will truly suffer is the villa owner. Consumers will only pay what they think is fair and reasonable in terms of an increase. Tourists have absolutely no stake in this. If the properties are not reassessed, look for property owners to take a bath. STJ has been lucky that it has been a good destination for the average Joe that makes a decent living. A big increase will send average Joe somewhere else.
It’s inevitable – St. John will soon be a destination for ONLY the rich. Even now – as much as I’d like to return, I can’t justify the expense of a one week’s vacation that would cost us a minimum $ 2500 for a $200/nite+tax “villa”, a 2-door Vitara, food and drink. And that doesn’t include airfare from Chicago… I am looking at Mexico for our winter destination….as much as I regret doing do!
While I certainly agree with Frank’s comments concerning those well deserved public workers who need raises I’m sure most would also agree that local governments have relied way too much upon property taxes in many different locations throughout the U.S. and now St. John. Sales taxes are one alternative that can benefit property owners while at the same time bring revenue to local governments. Allowing tourist (of which I am) to St. John as well as St. Thomas to pay more in sales tax would be an acceptable alternative in my opinion. Of course, food and medicine would be exempt. Those that spend more on lux goods can certainly afford that extra tax. Certainly, higher taxes in any form can hurt the locals and property owners, but raising property taxes like what they’re in the process of doing will hinder everyone in an even greater way. Some school districts on the mainland have now turned toward sales taxes as an alternative to always asking voters to increase property taxes. This has benefited retirees and others who don’t have children and therefore may not spend as much as those with large families. Spreading out more of the tax burden among those who are using the money certainly makes sense. I may stir up a hornets nest with this comment, but surely I’m not alone in this view.
We are planning on being on the island for Thanksgiving week of 2008 and I have to tell you – we booked our villa a few months ago.
We booked 10 straight years with carribean villas.It was almost 6k for a very nice 3 bedroom on choclate hole. I run a small business in New York. I agree, you can pass the real estate tax onto the consumer. But, realize trafiic will only bear so much tariff until it moves to another avenue. I disagree that the vacationer needs to shoulder the burden for the tax increase.Rather ,the owners may not be in the glory years that they have had for the last 15+ years.Our family is going to Honduras in march of 2008. It is less than half the cost of our previous rental (2800).There are many activities. We don’t have to listen to the locals how lucky we are that we can come and share the island paradise of St. John. Maybe St. John should have invested in itself and not expect the vacationer to do so now!
An increase in villa rental will certainly send my friends and family to another vacation area. AND with the talk of who should and should not be tipped (greeters, etc), it is just getting out of hand. As much as we (including approx. 20 others in our party) have not ventured to vacation elsewhere since our 1st visit, 4 years ago, it feels as though we will not be able to afford the beauty of STJ anymore.
I can only see a crisis on the horizon for STJ buisness and tourism, It is ashame I will not be able to return with that type of increase, to a place I would say is as close to heaven as it gets. I have lots of photos to remind me of this once great affordable (for everyone) paradise, but am forced to move on with great regrets.