Published On: Tue, May 17th, 2022

Road tax disappears unlawfully into general budget

PHILIPSBURG — In 2009 a detailed draft report estimated there was a road network maintenance backlog worth at least 360 million guilders ($201.1 million). During the following twelve to thirteen years, the situation has only worsened. This appears from a General Audit Chamber audit into the allocation of motor vehicle taxes.

The audit paints a devastating picture of the way successive governments have ignored the law. Based on the Motor Vehicle Tax Ordinance, road tax has to be allocated to a road fund. However, such a fund does not exist and a significant part of road tax revenue disappears into the general budget.

In 2021 the government collected 10.3 million guilders ($5.75 million) in road tax, but it allocated just 5.7 million guilders ($3.18 million) for infrastructure; this includes road maintenance, drainage, public lighting and traffic signs. The remaining 4.6 million ($2.6 million) went into the general budget.

Remarkably, in 2021 the government spent just 3.6 million ($2 million) on infrastructure maintenance, leaving 2.1 million ($1.17 million) unused.

In the same year, the government collected 275 million ($153.6 million) in taxes on regular gasoline. Of this amount, 45 million ($25.1 million) was earmarked for road maintenance.

The Audit Chamber recommends that the government acts in accordance with the Motor Vehicle Tax Ordinance and the Road Fund Ordinance ( the latter ordinance exists, but the fund has not been established). The Chamber also advises to make sure that stakeholders are aware of article 24a of the Motor Vehicle Tax Ordinance although it does not elaborate on the contents of this article. Lastly, the Chamber recommends the preparation of a multi-annual plan for the structural improvement of infrastructure and to provide for new investments.

The audit contains a clear message for the parliament: “Approving and adopting the national budget while ignoring the Motor Vehicle Tax Ordinance and the Road Fund Ordinance constitutes a breach in legal compliance.”

St. Maarten’s road network is in a shambles and even the ministry of VROMI is aware of it. An official advice on the road paving/patching program for 2020-2021states literally: “The country’s infrastructure had now reached a point whereby more than half of the road network has outlived its lifespan, has become worn and needs replacement.”

It’s not that the government is doing nothing at all, but it simply is not enough. In 2021 there was a budget of 1 million guilders ($558.6 million) plus a contingency fund of 103,000 guilders for road surfacing. The audit notes that long stretches of road surface were removed and replaced but that the original budget was overrun by a bit more than 562,000 guilders ($313,966). This overrun is linked to work done in Simpson Bay, on Bishop Hill Road, Sucker Garden Road and the A.T. Illidge Road.

The report also sheds some light on the way the government deals with public lighting. In 2021 the budget contained a provision of 900,000 guilders ($502,793) for maintenance. Of that amount, 740,000 guilders ($413,407) went to a contract with GEBE and 460,000 ($256,983) was paid for electricity. According to the report, 280,000 guilders ($156,425) then remained for maintenance, though these numbers do not add up. The conclusion from the Ministry of VROMI left however no room for guesswork: “There are insufficient funds for proper maintenance and replacement of public lighting.”

The Audit Chamber informed the ministers of Finance and VROMI on April 20 about its findings and offered the opportunity for a reaction. Both ministries failed to react. “Our findings, the overall state of the infrastructure and the consistent failure to comply with the law warrant a response from the ministers,” the report states.

The Audit Chamber furthermore points out that the objective of this audit is “to inform parliament about the allocation of motor vehicle taxes, its role in determining the legitimacy of the budget and to provide insight in the current situation.”