A good-faith pledge from the U.S. Senate Committee on Energy and Natural Resources to urge the U.S. Treasury to back local bond offerings will “greatly help” the territory realize “significant” savings when negotiating new bonds or refinancing current ones at more favorable interest rates, according to Gov. Albert Bryan Jr.
“All of us go through precarious financial situations. If this body would allow the (U.S.) Treasury to give us an option to back our bonds with full faith and credit just for the small territories – that’s an option that would have to be approved by Treasury – that move alone would just reduce the amount of debt level,” Bryan testified during a committee hearing Tuesday while in Washington, D.C. “We can go to the bond market, we could refinance that debt at AAA and probably save, for us, at least 10 percent in annual payments from our budget and redirect that towards doing things for our people.”
The committee agreed to send Treasury a bipartisan letter asking why this hasn’t happened before, with Committee Chair West Virginia Sen. Joe Manchin noting that currently, the territory’s bonds are only based on their liquidity.
After polling the other members, the committee agreed to send a bipartisan letter to the Treasury asking for an understanding of why the agency hasn’t added the territory.
“We want you all to succeed. We want to help you. We really do,” Manchin said.
Meanwhile, Bryan also urged committee members to consider waiving local match requirements that further tie up the territory’s ability to access funding and assistance that has been appropriated by Congress. Federal policy has imposed “significant restraints” on the U.S. Virgin Islands’ ability to attract private investment as the tax code treats U.S. investments within the territories as foreign ones, subject to taxes designed to discourage American companies from stashing profits in foreign tax havens such as the Cayman Islands.
“The U.S. Virgin Islands is neither foreign nor a tax haven. It is a U.S. territory whose tax laws are promulgated by Congress,” Bryan testified. “Treating us like a foreign country makes no sense and is contrary to decades of Congressional policies intended to encourage U.S. investment in the territories. I respectfully ask for your support in reversing this inequitable treatment.”
The hearing also included an update on the closure of the Limetree Bay refinery on St. Croix, which the governor said cost the territory 800 jobs and $663 million in reduced gross domestic product.
“We all share the U.S. Environmental Protection Agency’s concern with safety, but it is not clear that the EPA understands the unique importance of the refinery to the economic, financial, and social well-being of the Virgin Islands community,” Bryan said. “Environmental justice is a hollow victory without economic opportunity. I, therefore, ask for Congress’s assistance in working with the territory and EPA to ensure that the refinery is permitted to responsibly and safely reopen as soon as possible.”
As the sale of Limetree to Jamaica-based West Indies Petroleum closed, how the EPA will treat the permits necessary for reopening has been a question left unanswered. The EPA’s decision to halt Limetree’s operations after citing violations of federal pollution laws was a turning point in an ongoing saga that ultimately led, among other things, to Limetree’s declaring bankruptcy.
Bryan’s trip to the Capitol also included meetings with Housing and Urban Development Secretary Adrianne Todman; House Foreign Affairs Committee Chairman Gregory Meeks of New York; Senator Mike Crapo of Idaho; Rep. Bryan Steil of Wisconsin and a ranking member of the Select Committee on Economic Disparity and Fairness in Growth; and Senator Kirsten Gillibrand of New York.