(Washington, DC – September 10, 2003)—Delegate to Congress Donna M. Christensen and Governor Charles Turnbull attended today’s meeting of the Interagency Group on Insular Areas (IGIA) at the Department of the Interior in Washington, D.C.  The meeting, which is the first convened since its re-authorization by President George Bush, was attended by the governors and delegates of all the territories and the federal agencies which operate and fund programs to include Treasury, Transportation, Housing and Urban Development, Health and Human Services, Homeland Security, Energy, Commerce and others.

Citing the IGIA, Governor Turnbull said the group and its meetings were “an important  advance in the way the federal government develops policy towards the Insular Areas.”  He said that because so many critical issues affecting the smaller U.S. territories involve federal agencies other than the Department of Interior,  “it is essential to have a coordinating mechanism whereby the territories can be assured that their particular problems and interests can be fairly considered by the federal government.”

Turnbull identified five key areas that he wanted the agencies to address.  They include:

• Extending the rum tax cover-over rate which is due to expire at the end of this year and the permanent extension of the rate to avoid the need to seek periodic extensions.
• The enactment of new tax incentives to attract U.S. investment such as the proposed Section 956 which would allow U.S. owned or controlled companies incorporated and doing businesses in any of the U.S. territories to return profits earned in the territories back to their U.S. shareholders on a 90 percent tax-free basis.
• Technical tax reforms to adjust the impact to the territories of programs such as the Earned Income Tax Credit  (EIC) , the  Child Tax Credit and tax cut legislation which have resulted in a significant fiscal burden on the local government because of their “mirror code” status.
• Removal of the cap on Medicaid assistance.
• Consideration of the territories in the development of trade policies that have a significant impact on their local economies.

Delegate Christensen, who supported the Governor’s requests, added her own requests aimed at strengthening the territorial economy.  Thanking the Secretary and the Department for the Investment Conference held earlier this week, Christensen said that while discussions held there portend well for future investment and private sector development in the territories, the island governments “need an efficiently functioning government and a stable infrastructure to provide the optimal environment for the potential to be realized.”

“One critical part of the problem which you can collectively help us fix with funding and technical assistance is the implementation of a fully integrated and networked financial management system,” said Christensen.  “The problems you experience with grants would disappear,” she said. “It is certainly worth the investment.  It would enable us to do better planning and prioritizing because we would know what we have and where, and so will you.”  Christensen said that it is needed now and that efficient government cannot happen without it.

Other issues addressed by the Delegate included:

• The adjustment of federal poverty guidelines for the Virgin Islands which would allow us to access more federal funding for children, health care and other needs.
• The lifting of the Medicaid cap.
• The establishment of empowerment zones in the territories.
• The ability to use surface transportation funds for construction of access and development roads and participation in the State Infrastructure Bank programs.
• Consideration of the territory for military installations or their support services.
• Utilization of the Virgin Islands as a bridge to the rest of the Caribbean.