Feb. 11, 2009 — The massive federal stimulus package working its way through Congress will have money for the Virgin Islands, but details of what for and how much were still being hammered out in conference committee as of Wednesday evening.
Both versions of the bill are based largely on the proposals of President Barack Obama, though they vary from each other. Overall, the version passed Jan. 28 by the House of Representatives is more generous in its spending and more liberal toward the Virgin Islands and other U.S. territories than the version passed by the Senate Tuesday.
Gov. John deJongh Jr. and other U.S. governors support the act, but deJongh would prefer the final bill be closer to the House version than the Senate's.
"Passage of the American Recovery Reinvestment Act is critical to placing our country on the path towards economic stability and long-term growth," deJongh said in a prepared statement issued by Government House Wednesday. "My fellow governors and I support the aid to states and territories, and the flexibility provided for in the House-passed stimulus bill."
The Virgin Islands is expected to receive significant federal funding for education, health care, infrastructure and assistance for those hit hardest by the recession, deJongh said. Some national programs, however, took major cuts in the Senate bill, including assistance to state and local governments and money for school construction, he said.
The Senate bill has a provision requested by deJongh that would reimburse the territory for any local government tax revenue lost from the plan's tax cuts for middle-class and working families. Because the territory's tax system is tied directly to the federal system, any reduction in federal tax rates means a reduction in V.I. tax rates and less money for the V.I. government. This provision alone is expected to be worth a total of $50-$60 million for the Virgin Islands over the next two years, while providing individual taxpayers a tax cut of $500 and $1,000 for couples, according to Government House.
Both the House and Senate versions of the bill increase Medicaid payments to the territory; the House version by 20 percent and the Senate version by 15.2 percent. These increases will help the territory's two cash-strapped hospitals and its Medicaid patients, but still leaves the territory worse off than states. On the mainland, Medicaid is an individual entitlement and states are given allotments based on the number of low-income residents. In the Virgin Islands, Medicaid is given as a lump sum, amounting to a fraction of the total dollars that would be given to a state with similar demographics as the Virgin Islands.
"We've nearly tripled our allotment since 1997, from $3.8 million to over $10 million in 2006," Christensen said in 2007. "But if we were not capped, we would probably receive about $25 to $30 million." (See "Christensen Keeps Pushing for Medicaid Changes.")
Reached for comment Wednesday afternoon in Washington, Christensen said the details of the final package were still up in the air as intense negotiations continued in the joint conference committee putting together a final bill.
"We're seeing a lot of unhappy faces on the House leadership," Christensen said, suggesting the final bill may be closer to the Senate bill, will more tax cuts and less direct spending. "But the best I can tell you right now is it is still in flux and may change."
In the meantime, Public Works Commissioner Darryl A. Smalls has traveled to Washington, joining transportation secretaries and commissioners from around the United States to participate in a meeting with Transportation Secretary Ray LaHood and White House officials to get a better understanding of the infrastructure provisions of the stimulus bill.
Senate Majority Leader Harry Reid (D-NV) announced an agreement on the conference bill Wednesday afternoon, but as of 11 p.m. Wednesday night final negotiations were ongoing and final bill details were not yet publicly available.
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