During a “Pen and Pad” conversation held by Congresswoman Stacey E. Plaskett on Wednesday with the press, the Delegate discussed that the ten percent match of federal funds can be waived for recovery projects if the government takes well-thought-out steps.
The V.I. government is receiving billions in federal dollars, and it is also required to provide a 10 percent match for many recovery projects, including the new WAPA infrastructure on St. Croix, new schools, hospitals, etc. A tall order for a small economy.
The Source asked Plaskett her thoughts on any hope of getting some of the match requirements waived on the federal level.
“When we look at the potential of 15 to 16 billion in recovery, we recognize that the Virgin Islands government will need to come up with 1.5 or 1.6 billion to be able to execute on that. Under federal law there is a mechanism called the “Insular Areas Act” which allows small territories not including Puerto Rico to be able to have that 10 percent match waived. That’s not legislatively but through the federal government itself,” Plasket said.
Plaskett said that her office has spoken to the governor and knows that he has made multiple requests to have the match waived.
“My office has initially told the governor that we felt that he should ask for critical infrastructure to have that waived. That being our schools, hospitals, police stations, those kinds of components. We are glad to say that the governor is now making that request for critical infrastructure, but I think the second point is for us to demonstrate that we are good stewards of the funding. That we are able to have mechanisms to move the money along, that there are not tremendous overruns and that we are working expeditiously to get the money on the ground,” she said.
Plaskett said that in those instances, the 10 percent match is the means by the federal government to keep the local government on task and on track with how that money is spent. Recognizing that they should increase it, the local government will have to increase their component. “We stand a chance in getting that waived,” said Plaskett.
Plaskett also discussed that the governor spoke about the amount of funding received thus far during his “State of the Territory” speech on Monday. “We have not drawn down yet. A large portion of the six billion has not been spent. We have only spent about 3.1 billion of that and two billion or two and a half billion of that three billion is really with administrative costs as well as the immediate act after the hurricane cleanup. Creating a mechanism by which that money is on the ground is going to be key,” Plaskett said.
Also, during the presser, Plaskett spoke on rum cover over money and her concerns about the Virgin Islands coming to the end of its extension. “I just want people to realize that we are receiving rum cover over money at $10.50 and we are requesting $13.25. There has been legislation that has been put forth with tax extenders last week,” she said.
“I know that the governor and his team as well as our office have been in conversation with the chairmen as well as other members of that committee about that. I know that the ranking members requested that the rum cover over extension to be put in and it was not put in. So, we are continuing to have discussions with the senate where the bill will have to go,” Plaskett explained.
Plaskett said that after going to the House of Representatives, she is also having a discussion with the members on the floor when the bill comes up, and if not done, the next opportunity would be in a year.
“We know that the American tax bill that was placed under President Trump will expire in 2025 and a new bill will have to be drafted at that point. That will be the next opportunity for the rum cover over to be extended to $13.25 that we can immediately see on the horizon. This has happened in the past where we had the $13.25 expire and what happened previously was that we were retroactively given the $13.25 when it was put into an extender moving forward,” said Plaskett.
