What the Economic Stimulus Package means to the Virgin Islands

By: State: Virgin Islands | Source: AARP.org

The American Recovery and Reinvestment Act of 2009 recently signed by President Barack Obama has peaked the curiosity of Virgin Islanders who wonder how the economic stimulus will directly impact them.

Shortly after Congress forwarded the bill to the White House, Virgin Islands Governor John P. de Jongh (D) indicated that the Act would be a critical step along the path of Virgin Islands economic stability and long-term growth. As its share of the stimulus package, the territory will receive about $244-million and much of this money is intended to go toward education, health care and infrastructure improvements.

The Virgin Islands Medical Assistance Program (MAP), also known as Medicaid, is one area that is expected to receive a significant financial boost as a direct result of the Act. The impact of this additional funding has the potential of delivering a two-fold benefit to the Virgin Islands. As increased funding is made available to the MAP program, more low income individuals may be able to be served. As more individuals gain access to resources that pay for health care, there should be a corresponding drop in the rate of uncompensated care at each territorial hospital. This would free up funding originally placed in each hospital's budget intended to hire additional staff, purchase materials, supplies and equipment.

The V.I. will also benefit from language inserted into the Act that will enable the territory to recoup tax monies that otherwise would have been lost. With most Virgin Islanders expected to received a tax cut of $400 for individuals and $800 for a couple (VI Source, February 18, 2009), Governor de Jongh was deeply concerned that the local government would lose between $50 and $60 million in local revenue over the next two years. Congress' willingness to include this special provision enabling the V.I. to be reimbursed for tax revenue lost due to the tax cuts helps to ensure that the Act does not damage the local economy.

Virgin Islanders should know that the American Recovery and Reinvestment Act of 2009 provides the following dollar amounts for these identified areas:

• 13,420,329: Agriculture/Food Assistance Program
• 6,971,659: Department of Justice – law enforcement
• 33,063,000: Energy projects and programs
• 138,600: Homeland Security
• 2,909,637: Department of labor – work force training assistance
• 4,857,000: Department of Health and Human Services (including money for Administration on Aging)
• 22,820,264: Department of Education
• 67,000,000: Additional Assistance to states and territories (fiscal stabilization)
• 19,979,112: Department of Transportation (Transit capital assistance (FTA)
• 9,816,611: Housing and Urban Development
• 50,000,000: Tax relief for individuals and Making Work Pay tax credits

For more information on how the stimulus package will be utilized in the Virgin Islands, visit the special website that the Governor has created.

Other Resources

Governor John P. de Jongh on Stimulus Accountability and Transparency