Home News Local news DeJongh Testifies at Insular Affairs Meeting in DC

DeJongh Testifies at Insular Affairs Meeting in DC

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Feb. 27, 2008 — Gov. John P. deJongh Jr. on Tuesday submitted testimony to the meeting of the Interagency Group on Insular Affairs in Washington, D.C. In his testimony, deJongh revisited issues such as the cap on rum excise taxes, discriminatory caps on Medicaid funding, S-CHIP funding and more.
The issues included removal of the cap on run excise taxes returned to the Virgin Islands, equal treatment of territory in individual benefit programs; elimination of discriminatory caps on Medicaid funding; S-CHIP funding and the low income home energy assistance program. De Jongh also urged the Interagency Group on Insular Affairs to consider the establishment of a fully-staffed and equipped border patrol unit in the Virgin Islands.
On the issue of the removal of the cap on rum excise taxes returned to the territory, deJongh stated, “It is generally accepted that there are no policy reasons that stand in the way of Congressional action to remove the cap and allow the Territory to receive the full amount of the tax imposed on Virgin Islands rum. The tax was imposed, in the first place, not to raise revenues for the Federal Government, but rather to ensure a level playing field for domestically produced distilled spirits with which Virgin Islands rum competes in the U.S. market.
"Rather, it would appear that the reasons blocking a permanent solution to this problem up until now is a more practical one: Under the Congressional budget rules, a Congressionally-initiated legislative change must be offset with other revenues, but a permanent solution proposed by the Administration as part of its annual budget proposals to the Congress does not. The Government of the Virgin Islands therefore respectfully requests that the IGIA work to include a permanent solution to the rum tax formula by removing the rum tax cap in the Administration’s next budget submission to the Congress.”
In making the case for federal assistance on the Medicaid front, deJongh wrote, “The ability of the Virgin Islands Government to assure adequate health care for Island residents is hampered by the discriminatory cap on Medicaid funds provided to the Virgin Islands and the other U.S. Territories," he said.
"Medicaid is a Federal-State program to provide for the health care needs of the poorest and neediest persons in our country. In the U.S. Virgin Islands and the other U.S. Territories, Medicaid is not an entitlement program. Rather, the Virgin Islands and other U.S. Territories receive a capped funding amount for its Medicaid-eligible population. This capped amount is far from adequate to cover the health care needs of the eligible population. The quality of health care and the amount of federal support should not depend on whether an individual lives in California, Alaska or in a United States Territory. While Congress approved three years ago an increase in the amount of Medicaid funds provided to the Virgin Islands, such increases only narrow the gap between the funds allocated to the Virgin Islands and funds the Virgin Islands would be entitled to if the Virgin Islands were treated as a State under the Medicaid formula.”
DeJongh asked for federal support for further further improvements in the Medicaid formula and to ensure that the neediest residents in the Territories receive no less favorable treatment than the neediest residents in the United States.”
DeJongh also explained to the committee that artificial funding caps also seriously impede the ability of the Virgin Islands and the other U.S. Territories to address the health care needs of uninsured children under the State Children's Health Insurance Program (S-CHIP). S-CHIP is a State-Federal partnership program that was created by Congress in 1997 to increase health insurance coverage for low-income children. Because of inadequate funding levels ($1.3 million in S-CHIP funding for FY 2007), the Virgin Islands has never been able to establish a viable S-CHIP program for its low-income children. Instead, under applicable regulations, the Virgin Islands have been permitted to combine its limited S-CHIP funding with funding under Medicaid to provide health care for Medicaid eligible children. However, due to caps in Medicaid funding for the U.S. Territories, these combined resources are entirely inadequate to cover the numbers of eligible children. Moreover, unlike funding for the States, funding for the U.S. Territories is based on capped flat dollar amounts that do not take into account the health care needs of low-income children in the Territories.
Like other U.S. Territories, the Virgin Islands has a significant population of low-income children in need of health care. According to 2004 estimates, one in three children in the Virgin Islands live with a family whose income is below the Federal poverty level – a child poverty rate higher than any U.S. State. The V.I. Department of Health estimates that some 12,000 of the Territory's children live below the poverty level. Currently, to qualify for assistance, eligible children must reside with families that earn no more than $8,500 – less than half the federal poverty level. However, due to the inadequacy of its combined S-CHIP and Medicaid resources, the Virgin Islands is unable to provide health care assistance to all children even in this very low income range.
Significant increases in S-CHIP funding are required to serve the serious health care needs of children in the Virgin Islands and the other U.S. Territories. The Virgin Islands respectfully requests that the IGIA work to increase S-CHIP funding for the U.S. Territories to address the very high levels of childhood poverty in these jurisdictions.”
DeJongh also said in his testimony to the IGIA group that discriminatory allocation formulas also prevent the U.S. Virgin Islands and other U.S. Territories from benefiting equitably from the Federal Low Income Home Energy Assistance Program (LIHEAP).
LIHEAP is a block grant program designed to assist low-income households in meeting their immediate home energy needs. The program's particular focus is on households with the lowest incomes that pay a high proportion of household income for home energy. Although LIHEAP is commonly viewed as a home heating program, it is employed in all regions of the country to assist low-income persons with the full range of household energy needs.
The Virgin Islands, like the other U.S. Territories, has particularly high levels of poverty and high energy costs. The Virgin Island's poverty rate of 32 percent (2000 Census) is some two-and-one-half times the national poverty rate. The Virgin Islands has among the highest energy costs of any U.S. jurisdiction. Based on these factors, under equitable allocation formulas, the Virgin Islands and other U.S. Territories should benefit significantly from LIHEAP funding. However, due to a regulatory cap on LIHEAP allocations, the Virgin Islands and other U.S. Territories receive far less in LIHEAP funding on a per capita basis than many States. In recent years, for example, the Virgin Islands has received only $90,000 out of a total of almost $2 billion in LIHEAP funding. The LIHEAP statute empowers the Department of Health and Human Services to provide the U.S. Territories with total LIHEAP funding of between one-tenth of 1 percent and one-half of one percent of total LIHEAP funding for each fiscal year. However, under HHS regulations, the U.S. Territories are capped at the same minimal percentage (about 0.14 percent) as they received in FY 1981, despite the significant poverty and energy needs of these Territories. The government of the Virgin Islands respectfully requests that the Administration support, through the IGIA process, an increase in the overall HHS LIHEAP allocation percentage for the U.S. Territories which properly reflects the significant needs of the Territories for low-income energy assistance.
DeJongh pointed out that while the Customs and Border Protection Service (CBP) recently announced expansion of the CBP presence in the Virgin
Islands, there is still no full Border Patrol station in the Virgin Islands, with the closest station responsible for protecting the Territory’s borders and coast line located in Puerto Rico.
“The station in Puerto Rico, however, must focus primarily on the hundreds of miles of coastline in that part of the Caribbean, leaving the coastline and coastal waters of the Virgin Islands largely exposed and vulnerable to human smuggling and drug trafficking," he said.
"As a result, international smugglers and organized crime have been increasingly utilizing the Virgin Islands as a major transshipment point into the United States. In addition to the implications for national and regional security, the scourge of smuggling and illegal drug trafficking has had a direct impact on the crime rate and on the quality of life in the Territory.”
DeJongh requested the support of the IGIA for the establishment of a fully staffed and equipped Border Patrol Unit in the Virgin Islands.
DeJongh is in Washington this week for days of meetings with Congressional leaders in both the House and U.S. Senate and to host a reception in which the 2008 Alexander Hamilton Public Service Awards will be presented.
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