{ "id": "R45235", "type": "CRS Report", "typeId": "REPORTS", "number": "R45235", "active": true, "source": "EveryCRSReport.com", "versions": [ { "source": "EveryCRSReport.com", "id": 617415, "date": "2020-02-13", "retrieved": "2020-02-19T23:08:02.083689", "title": "Economic and Fiscal Conditions in the U.S. Virgin Islands", "summary": "Fiscal and economic challenges facing the U.S. Virgin Islands (USVI) government raise several issues for Congress. Congress may choose to maintain oversight of federal policies that could affect the USVI\u2019s long-term fiscal stability. Congress also may consider further legislation that would extend or restructure long-range disaster assistance programs to mitigate those challenges and promote greater resiliency of infrastructure and public programs. Federal responses to the USVI\u2019s fiscal distress could conceivably affect municipal debt markets more broadly. Greater certainty in federal funding for disaster responses and Medicaid could support the USVI economy.\nThe USVI, like many other Caribbean islands acquired by European powers, were used to produce sugar and other tropical agricultural products and to further strategic interests such as shipping and the extension of naval forces. Once the United States acquired the U.S. Virgin Islands shortly before World War I, they effectively ceased to have major strategic importance. Moreover, at that time the Virgin Islands\u2019 sugar-based economy had been in decline for decades. \nWhile efforts of mainland and local policymakers eventually created a robust manufacturing sector after World War II, manufacturing in the Virgin Islands has struggled in the 21st century. In particular, the 2012 closing of the HOVENSA refinery operated by Hess Oil resulted in the loss of some 2,000 jobs and left the local economy highly dependent on tourism and related services. A renovation of the HOVENSA complex is reportedly in progress.\nThe territorial government, facing persistent economic challenges, covered some budget deficits with borrowed funds, which has raised concerns over levels of public debt and unfunded pension liabilities. Local policymakers have proposed tax increases and austerity measures to bolster public finances, which currently operate with restricted liquidity. The Government Accountability Office (GAO) expressed doubts that those fiscal measures would restore access to capital markets or address shortfalls in the funding of public pensions. The previous governor, Kenneth Mapp, set forth measures in his FY2019 budget proposals to delay expected public pension insolvency from 2024 to 2025 and promised to outline other measures that would further delay insolvency until 2028. Governor Albert Bryan Jr. succeeded Mapp in January 2019.\nDamage caused by two powerful hurricanes\u2014Irma and Maria\u2014that hit the USVI in September 2017 created additional economic and social challenges. Public revenues, according to estimates based on USVI fiscal data, were halved after the two hurricanes. The USVI economy has relied heavily on tourism and related business activity, which made it more vulnerable to the effects of hurricanes than jurisdictions with more diverse economies. The severity of damage from Irma and Maria, and the subsequent disruption of the USVI tourism industry, suggest that a full economic recovery could take years.\nFederal disaster assistance has included aid to public institutions, such as long-term loans to the USVI government and two hospitals; loans and grants to individuals and small businesses; and direct operations of the Federal Emergency Management Administration (FEMA), the U.S. Army Corps of Engineers, the U.S. Coast Guard, and other federal agencies. Funding for disaster relief has been augmented by supplemental appropriations. The extent of federal disaster assistance received by the USVI will depend, in part, on how funds provided in response to needs resulting from hurricanes and fires in 2017 are allocated among affected areas. The Bipartisan Budget Act of 2018 (P.L. 115-123; \u00a720301), enacted on February 9, 2018, included additional Medicaid funding for the USVI and Puerto Rico through September 30, 2019. The U.S. Department of Housing and Urban Development (HUD) allocated $774 million in mitigation funds (CDBG-MIT funds) to the U.S. Virgin Islands and put restrictions on their use.", "type": "CRS Report", "typeId": "REPORTS", "active": true, "formats": [ { "format": "HTML", "encoding": "utf-8", "url": "https://www.crs.gov/Reports/R45235", "sha1": "c4d5deb85ccd7e0bbecf3c632f1557b2884a584a", "filename": "files/20200213_R45235_c4d5deb85ccd7e0bbecf3c632f1557b2884a584a.html", "images": { "/products/Getimages/?directory=R/html/R45235_files&id=/4.png": "files/20200213_R45235_images_7e27b775a8fc6e6fb61341a2d5a6d3359147ea9e.png", "/products/Getimages/?directory=R/html/R45235_files&id=/2.png": "files/20200213_R45235_images_1a5663bd13461124c5b0d079b5edc76819a23237.png", "/products/Getimages/?directory=R/html/R45235_files&id=/3.png": "files/20200213_R45235_images_4592490d85de795e3a31edb229d599aed14932b5.png", "/products/Getimages/?directory=R/html/R45235_files&id=/0.png": "files/20200213_R45235_images_29223e8dec494a027756b50b5fbe74fd68a95233.png", "/products/Getimages/?directory=R/html/R45235_files&id=/1.png": "files/20200213_R45235_images_d006564a2a5ad0413032dc22d963b537a05f2e96.png" } }, { "format": "PDF", "encoding": null, "url": "https://www.crs.gov/Reports/pdf/R45235", "sha1": "5354c86a45b30e99b8cf2284a9f595a86769ea38", "filename": "files/20200213_R45235_5354c86a45b30e99b8cf2284a9f595a86769ea38.pdf", "images": {} } ], "topics": [] }, { "source": "EveryCRSReport.com", "id": 584031, "date": "2018-06-20", "retrieved": "2019-12-20T21:16:48.259986", "title": "Economic and Fiscal Conditions in the U.S. Virgin Islands", "summary": "Fiscal and economic challenges facing the U.S. Virgin Islands (USVI) government raise several issues for Congress. Congress may choose to maintain oversight of federal policies that could affect the USVI\u2019s long-term fiscal stability. Congress also may consider further legislation that would extend or restructure long-range disaster assistance programs to mitigate those challenges and promote greater resiliency of infrastructure and public programs. Federal responses to the USVI\u2019s fiscal distress could conceivably affect municipal debt markets more broadly.\nThe USVI, like many other Caribbean islands acquired by European powers, were used to produce sugar and other tropical agricultural products and to further strategic interests such as shipping and the extension of naval forces. Once the United States acquired the U.S. Virgin Islands shortly before World War I, they effectively ceased to have major strategic importance. Moreover, at that time the Virgin Islands\u2019 sugar-based economy had been in decline for decades. \nWhile efforts of mainland and local policymakers eventually created a robust manufacturing sector after World War II, manufacturing in the Virgin Islands has struggled in the 21st century. In particular, the 2012 closing of the HOVENSA refinery operated by Hess Oil resulted in the loss of some 2,000 jobs and left the local economy highly dependent on tourism and related services. \nThe territorial government, facing persistent economic challenges, covered some budget deficits with borrowed funds, which has raised concerns over levels of public debt and unfunded pension liabilities. Local policymakers have proposed tax increases and austerity measures to bolster public finances, which currently operate with restricted liquidity. The Government Accountability Office (GAO) expressed doubts that those fiscal measures would restore access to capital markets or address shortfalls in the funding of public pensions. Governor Kenneth Mapp, in his FY2019 budget proposals, set forth measures that would delay expected public pension insolvency from 2024 to 2025 and promised to outline other measures that would further delay insolvency until 2028.\nDamage caused by two powerful hurricanes\u2014Irma and Maria\u2014that hit the USVI in September 2017 created additional economic and social challenges. Public revenues, according to estimates based on USVI fiscal data, were halved after the two hurricanes. The USVI economy has relied heavily on tourism and related business activity, which made it more vulnerable to the effects of hurricanes than jurisdictions with more diverse economies. The severity of damage from Irma and Maria, and the subsequent disruption of the USVI tourism industry, suggest that a full economic recovery could take years.\nFederal disaster assistance has included aid to public institutions, such as long-term loans to the USVI government and two hospitals; loans and grants to individuals and small businesses; as well as direct operations of the Federal Emergency Management Administration (FEMA), the U.S. Army Corps of Engineers, and the U.S. Coast Guard, among other federal agencies. Funding for disaster relief has been augmented by supplemental appropriations. The extent of federal disaster assistance received by the USVI will depend, in part, on how funds provided in response to needs resulting from hurricanes and fires in 2017 are allocated among affected areas. The Bipartisan Budget Act of 2018 (P.L. 115-123; \u00a720301), enacted on February 9, 2018, included additional Medicaid funding for the USVI and Puerto Rico through September 30, 2019.", "type": "CRS Report", "typeId": "REPORTS", "active": true, "formats": [ { "format": "HTML", "encoding": "utf-8", "url": "https://www.crs.gov/Reports/R45235", "sha1": "abe59cec62a8e6f4de4e80f82342dd84885e3353", "filename": "files/20180620_R45235_abe59cec62a8e6f4de4e80f82342dd84885e3353.html", "images": { "/products/Getimages/?directory=R/html/R45235_files&id=/2.png": "files/20180620_R45235_images_5c82ef9f026f85964bf71eda5457f978107a4061.png", "/products/Getimages/?directory=R/html/R45235_files&id=/3.png": "files/20180620_R45235_images_80e0c376fe4c1881b9b96382c76186e4735b7aec.png", "/products/Getimages/?directory=R/html/R45235_files&id=/0.png": "files/20180620_R45235_images_d465ce4319c72e76401b33196c07b5d9b16429c9.png", "/products/Getimages/?directory=R/html/R45235_files&id=/1.png": "files/20180620_R45235_images_d006564a2a5ad0413032dc22d963b537a05f2e96.png" } }, { "format": "PDF", "encoding": null, "url": "https://www.crs.gov/Reports/pdf/R45235", "sha1": "e99cb5fb3ef12b4a3be481fe022ab3398121e975", "filename": "files/20180620_R45235_e99cb5fb3ef12b4a3be481fe022ab3398121e975.pdf", "images": {} } ], "topics": [] } ], "topics": [ "Appropriations", "Economic Policy" ] }