Home News Local news $46M HUGO LOAN CLOSER TO CANCELLATION

$46M HUGO LOAN CLOSER TO CANCELLATION

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June 14, 2001 — The Turnbull administration’s effort to have the territory’s $46-million Hurricane Hugo disaster loan cancelled received a boost Wednesday as Congress hashed out next year’s budget.
The House Appropriations Committee approved a $3.5 million appropriation to cover the cost of cancelling the outstanding balance on the Hugo loan, said Gov. Charles Turnbull. The move by Congress follows a re-estimate of the current net value of the territory’s Hurricane Hugo Community Disaster Loan, which was given soon after the devastating storm struck in 1989.
The re-estimate was done under the Federal Credit Reform Act at the behest of the V.I. government.
If the U.S. Senate Appropriations Committee next approves the re-estimate, the territory’s $46 million debt would be reduced by nearly 97 percent, leaving a new balance of just more than $1 million. Turnbull said the federal government has already shifted nearly $45 million into a special account to cover the cost of the writeoff. The $3.5 million will cover the re-estimated loan balance and interest.
"This is great and welcome news…," Turnbull said in a release. "We are beginning to dig our way out of our accumulated debt and to build a solid foundation for sustained economic recovery."
He thanked Rep. Joe Skeen (R-NM), chairman of the House Interior Appropriations Committee, who recommended the $3.5 million appropriation to the full committee last week.
Just as important to the cash-strapped V.I. government as the $3.5 million appropriation is the Federal Emergency Management Agency’s decision earlier this year to extend the suspension of debt payments on the Hugo loan through the end of the end of the fiscal year in September. That would keep the administration from having to pay out $8 million.
Meanwhile, the governor said he has ordered the V.I. Office of Management and Budget to prepare a petition to cancel the $150 million Hurricane Marilyn Community Disaster Loan, which will be submitted to the federal government this month. Marilyn pounded the territory in 1995.

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