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HomeNewsArchivesBABBITT: FEDS TO FORGIVE MILLIONS IN V.I. DEBT

BABBITT: FEDS TO FORGIVE MILLIONS IN V.I. DEBT

U.S. Interior Secretary Bruce Babbitt said Monday at Government House that about $50 million in assistance, most of it in the form of debt forgiveness, has been earmarked for the Virgin Islands.
At a press conference with Gov. Charles W. Turnbull in which a coral reef management program was announced, Interior officials identified more than $11 million in reprogrammed federal grant monies for the territory in addition to the debt forgiveness.
Babbitt had nothing but encouraging words for Turnbull and the territory. He said he was "enormously proud" of Turnbull's efforts in the past 18 months to pull the territory out of its fiscal crises. Congress, Babbitt said, can see the Virgin Islands has made real steps toward change.
"The V.I. isn't too far in airline miles from Washington," Babbitt said, "but it is many, many miles in the political perception of the U.S. Congress."
Indeed, the territory must be doing something right in the secretary's eyes: Babbitt said after his stint at Interior is over, he plans to move to the U.S.V.I.
Babbitt was clearly satisfied with progress made in accordance with the Memorandum of Understanding signed last October by him and the governor for the fiscal recovery of the territory. He said the memorandum had been closely monitored.
Ferdinand Aranza, director of Interior's Office of Insular Affairs, said $42 million would go toward reduction of the V.I.'s debt incurred after Hurricane Hugo in 1989. With interest, he said, the loan balance could drop to as little as $4 million.
Aranza listed the accomplishments the V.I. government has made in fulfilling terms of the memorarndum. He said Turnbull has:
– kept the FY2000 budget at $432 million (though the Legislature subsequently raised that figure somewhat);
– created a five-year fiscal recovery plan;
– reduced government employee overtime by 50 percent;
– reduced payroll by 5 percent;
– cut five holidays (though the Legislature reinstated some of them).
Aranza said as of July, there was an overall decrease in government spending of $77 million, $32 million of that in personnel costs. Also, he said, $11.5 million in federal grants not drawn down by the local government can be reprogrammed to help the territory.
"Just show us the paperwork," he said.
Babbitt said a joint local and federal coral reef management program should be a reality by the end of this year. There has been a U.S. Coral Reef Task Force in effect since 1998, and Babbitt stressed the "compelling need to protect the reef resources and fisheries."
Noting that 2 percent of local waters are federally owned, he said the ocean cannot be fenced off and cooperation is essential, since "fishes have no fixed address."
Interior is holding public meetings on options for coral reef protection on Sept. 18 on St. Croix, Sept. 19 on St. Thomas and Sept. 20 on St. John.
Babbitt and Turnbull were joined by V.I. Delegate to Congress Donna Christian Christensen, Lt. Gov. Gerard Luz James II and Senate President Vargrave Richards.

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