Shunned from bond market, U.S. Virgin Islands faces cash crisis

[Eugene]

Source: Reuters

#BUSINESS NEWS
AUGUST 2, 2017 / 1:27 AM / 6 HOURS AGO

Shunned from bond market, U.S. Virgin Islands faces cash crisis

Robin Respaut

-snip-

For years the U.S. Virgin Islands funded essential public services with help from Wall Street. Investors lined up to purchase its triple-tax-exempt bonds, a form of debt free from municipal, state and federal taxes.

Now the borrowing window has slammed shut. Trouble in neighboring Puerto Rico, which recently filed for a form of bankruptcy after a string of debt defaults, has investors worried that the U.S. Virgin Islands might be next.

With just over 100,000 inhabitants, the protectorate now owes north of $2 billion to bondholders and creditors. That’s the biggest per capita debt load of any U.S. territory or state - more than $19,000 for every man, woman and child scattered across the island chain of St. Croix, St. Thomas and St. John. The territory is on the hook for billions more in unfunded pension and healthcare obligations.

“We have a government that we can’t afford, and now all of it is converging,” said Holland Redfield, a former six-term U.S. Virgin Islands senator who hosts a radio talk show about politics in the territory. “We’re getting to the point where we may have a potential meltdown.”

-snip-

Read more: http://www.reuters.com/article/us-usa-virginislands-crisis-idUSKBN1AI0D2

[TexasTowelie]

1. The legislators in the Virgin Islands

have higher salaries than in most state legislative bodies. I believe that they start at $75,000 per year. Once they get in office they are so entrenched that they maxed out on their pension benefits.

It looks like the government is going to make some adjustments into retiree insurance benefits. I've posted the proposed cuts in this thread:
https://www.democraticunderground.com/128685