April 22, 2001 – Delegate Donna Christian-Christensen said Saturday the V.I. government has "no choice about becoming more accountable," at least where federal funds are concerned. There have been "significant threats" that the nearly half billion dollar-a-year federal expenditures here will be severely cut if territorial agencies don't display more accountability.
Christensen, keynote speaker at at the annual meeting of the League of Women Voters, said one of the biggest crises is in education and it is "severe."
Federal officials "want to see the money get to the children," she said, but there is pressure to see more reckoning in all departments that get federal funds.
"Federal agencies do site visits to see if the money they sent was actually used for its intended purpose," Christensen said, indicating federal inspectors weren't happy with what they found.
In fact, unused federal funds have been and will continue to be sent back to the federal government, she said.
Countless audits over the years have enumerated serious deficiencies in handling federal funds, but the audit recommendations have seldom been heeded, Christensen said after her presentation.
One of the problem areas, aside from Education, is training. In the Labor Department, money was set aside for off-island training that was never used and therefore had to be returned.
Christensen also said "technical assistance dollars" are available for training in handling federal funds. "The application is very simple," she added, but few, if any, departments have taken advantage of them.
Then there are the huge federal tax cuts – $2 trillion – over the next five years, which Christensen said would trickle down to the territory, likely causing cuts in labor, health, human services and welfare-to-work programs, which are already failing in the Virgin Islands.
Christensen addressed with some vehemence the gasoline excise tax issue, referring to some members of the Legislature who want to "keep it (gasoline excise tax) in the media, probably deliberately." But she repeated that pushing for the return of excise taxes on gasoline products made in the U.S. Virgin Islands could jeopardize other initiatives. "It's easier to address a nice windfall from the federal government than to address the problems here," she said.
However, she said she had brought the gasoline excise tax issue to the attention of the White House and members of Congress, adding, "I understand the issue and the climate better than anyone" else.
The focus, she said, should be on the rum excise tax, which is "clearly do-able."
The current agreement, reached during the Clinton administration, sends taxes totaling $13.25 tax per gallon of rum produced in the V.I. back into the local treasury – an increase of $2.75 over the previous return. But the rebate is a temporary measure that expires at the end of the year.
"But even at that level, it is not included in President Bush's budget," Christensen said, although "the right of the V.I. to this money is clear."
She said she is working with the House Ways and Means Committee to find an appropriate measure to which an amendment could be attached, probably "something from (Rep.) Charlie Rangel."
Christensen expressed concern about confusion being generated in Washington with three groups now pushing V.I. agendas: her voice, the administration's voice through lobbyists Winston and Strawn, and the Dutko Group that was hired to represent the V.I. Legislature's majority.
"People are confused," she said. They want to know "who is this ambassador who went to visit" members of the U.S. Congress, referring to the most recent trip to Washington by Sens. Almando "Rocky" Liburd and Donald "Ducks" Cole.
"Whenever this happens, we run the risk of losing," she said. "A separate agenda is creating confusion at a time when we can't afford it."
A particular concern of the League of Women Voters is the earned income tax credit the Virgin Islands must pay without having a funding source.
Christensen said she had fostered a proposal for 60 percent of the tax credit to come from FICA. The territory would still be responsible for paying 40 percent of the credit, which is a refundable federal tax credit for eligible individuals and families who have earned income, but less than $31,152.
Regarding the excess $50 million found in the Unemployment Insurance Fund, Christensen said it would take an congressional amendment to the Social Security Act for the money to come back to the territory. However, she indicated support for such an amendment is unlikely at this point, saying, "When money comes here, it goes down a black hole. All funding we get should be for a purpose and have a plan."
The meeting was held at the William P. MacLean Marine Science Center on the St. Thomas campus of the University of the Virgin Islands.
