Plaskett Discusses What the New Democratic Majority Means for the USVI

Delegate Stacey Plaskett (File photo)
Delegate Stacey Plaskett (File photo)

As Delegate Stacey Plaskett (D-VI) begins her third term in Congress representing the U.S. Virgin Islands, she and the Democratic Party are in the majority for the first time. But the Senate and presidency are controlled by the GOP. What are the prospects for legislation impacting the territory during this time of divided government? Delegate Stacey Plaskett sat down with the Source recently to talk about these and other issues.

V.I. Gets a Vote on House Floor in the New Congress
Plaskett said the first piece of legislation approved by the new Congress was rules for the House and floor votes, giving the territories more say.

“We don’t get to vote in every vote but the interpretation the Democrats have taken is, when the House rises to the Committee of the Whole, members from the territories vote,” she said.

If the vote is so close the members from the territories would alter the outcome if they were not engaged, then the vote is taken over again.

“But this is very helpful to members, one to see how the members from the territories vote, other members get to see where we stand. Also so our constituents get to see where we stand,” she said.

Meanwhile, she said the first bill in the Congress: H.R. 1, has language recognizing the territories do not have a vote and should have a vote.

Infrastructure Bill
A potential large transportation and infrastructure bill is really exciting for the territory, she said.

“We are talking about a $3 trillion piece of legislation primarily paid for by the government.” Plaskett said.

“President Trump tried one that was 20 percent paid by the federal government and 80 percent by municipalities. We want to reverse those percentages,” she said. While they are still looking a ways to pay for it, she feels “Virgin Islanders should feel very hopeful about this piece of legislation.”

Plaskett caucuses with the New Democrats; the centrist, pro-business wing of the party, rather than the progressive wing or the more conservative “Blue Dogs,” who may vote more frequently with Republicans. She said the New Democrats have named her to their task force on infrastructure and that as a member of the Transportation Committee, she will play a part in the making of this bill.

“My emphasis will be on our ports. Of course Virgin Islanders are concerned about the roads. But it is my belief we should spend quite a bit of time on sea ports and air ports. Not just for tourism but also for commerce. And not just for cruise ships but also to be a hub for transshipment,” she said.

Caneel Bay Legislation Needs To Be Reintroduced
Caneel Bay Resort on St. John has been in limbo since Hurricane Irma hit in 2017, causing massive damage. It has in recent years been one of the single largest employers on St. John, if not the largest, and its revenues and jobs are important not just for St. John but the entire territory. The Westin St. John Resort Villas with 252 rooms is larger than Caneel Bay with 166 rooms, but the Westin is largely time-share.

Caneel Bay, which is inside the federal V.I. National Park, is in limbo while Congress considers legislation to grant the owners a long-term lease. Stoneleigh Capital LLC, the parent company of CBI Acquisitions, which owns Caneel Bay Resort, has been seeking a long-term extension to its lease. The owners say they cannot justify the $100 million-plus investment to fix and refurbish the resort without a very long lease. The current retained use estate, or RUE, the agreement under which they operate the resort, dates back to Laurance Rockefeller’s donation of the Caneel property to the National Park Service in 1983.

Legislation sponsored by Plaskett in the previous Congress aimed to give the owners a 60-year lease, to encourage the owners to rapidly reopen.

Some on St. John and in the territory have questioned whether the lease is too long, too generous, or even if a private resort should continue. Plaskett has long held the deal is the best bet to get St. Johnian’s back to work, more tourists back on the island and more revenue into the economy.

The legislation codifying a longer RUE died with the previous Congress and will need to be reintroduced, Plaskett said. It was approved in committee in the last Congress, so it should be fine in committee this time too, she said.

“I just want to make sure we have the support of who we need and answers to some questions about what should or should not be in it,” Plaskett said.

“I have talked with the owners about what we would like to see and have had discussions about amendments I should be offering if I reintroduce it,” she added.

“We will see in less than a month what will happen,” she said.

Medicare and Medicaid
The way the federal government treats the territory for Medicare and Medicaid can impact hundreds of millions of dollars in annual funding, with ripple effects throughout the local economy, the V.I. government budget and the quality of life and health care of Virgin Islanders.

The federal government pays at least 50 percent of the Medicaid program’s cost in each of the states and around 80 percent in the poorest states. In general, federal law caps total funding and puts a floor on local matching funding in the territories, for no reason other than the word “territory.”

The 2010 Affordable Care Act temporarily increased available money for the USVI – but the territory still had to pony up the matching funds, amid hard fiscal times. In 2016, Gov. Kenneth Mapp proposed $14 million in local Medicaid matching funds in his Fiscal Year 2017 budget, which would have brought about $17 million in federal dollars for about $31 million in Medicaid funding in all, at the usual matching formula.

After the 2017 hurricanes, the federal government temporarily waived the match and has budgeted more than $107 million for the USVI from Jan. 1 2018 through Sept. 30, 2019.

“The Medicaid match is 100 percent until 2020. … With the 100 percent match, that benefits additional people. The issue we have is we still also have a cap. There was additional money put in under disaster funding. But ultimately the goal is to be like other states and not have a cap,” Plaskett said.

Medicare, which every citizen gets at age 65, is more flexible. But Plaskett and her predecessor, Donna Christensen, along with V.I. hospital officials, have for years pushed to have the reimbursement rates provided by the Centers for Medicare and Medicaid Services updated.

“We have ongoing issues with CMS because the rates are very old,” Plaskett said.

Te delegate said several local disadvantages, from cost of living to storm damage, may help make the case for changing reimbursement rates.

“It is my hope we can make a really strong argument with CMS because of what has happened in the territory and because of utility costs, that those rates should be changed,” she said.

“Their argument has been that a lot of places want to change their rates. So they have asked: can you give something demonstrably different about the U.S. Virgin Islands that would allow for a change,” she said.

In the past, the territory has pointed to the many years since the rates were changed.

“We have much higher utility rates than other areas, which creates a strain on the hospitals,” she said.

Also, stateside jurisdictions are able to take advantage of higher rates for hospitals that serve rural and less wealthy patients, while the territory cannot.

“Puerto Rico receives it but the U.S. Virgin islands does not, although our hospitals meet the criteria,” she said.

Caribbean Basin Initiative Funding
In 2017, Plaskett raised a concern that the U.S. Virgin Islands may have been shortchanged by as much as $100 million in federal excise tax revenues that are part of the Caribbean Basin Initiative. V.I. revenues since the Diageo Agreement may not have been properly adjusted to reflect the new production of rum in the Virgin Islands, denying the territory tens of millions of dollars over time.

The money in question comes from federal alcohol excise taxes on liquor imported to the United States from other nations. Puerto Rico and the USVI both get back nearly all of the federal taxes on their own rum production, but under the Caribbean Basin Initiative, enacted by Congress in 1983, the U.S. Treasury splits much of the tax revenue from rum imported into the United States by other nations too. Each territory gets a share determined by a complicated formula tied to each territory’s market share, relative to each other. Treasury regulations provide that the USVI can earn between 12-49 percent, with Puerto Rico qualifying for 51-88 percent.

A lot of data suggest the USVI has been responsible a much higher proportion of the two territories’ production in recent years. Yet Caribbean Basin Initiative Funding has remained flat for years, despite a fairly sharp increase in total rum production.

Plaskett has said the V.I. government has to push the question.

Asked where it stood, Plaskett said she had previously contacted the U.S. Treasury about it.

“Treasury responded saying you raise interesting arguments but we are not sure we agree. Your government should press the issue,” Plaskett said.

“Mapp was not willing to press that argument,” she said, “but I have raised it again with Gov. (Albert) Bryan and he says he is very interested in pursuing it.”

Plaskett credited the Diageo and Cruzan Rum distilleries for pointing out the discrepancy, saying “they would very much like to support us in making that argument with Treasury.”

What are the prospects for getting more of that funding in the future?

“We will see what happens. The gold standard would be we get back the money we are owed. At the very least, I would hope that going forward we are getting it right.” Plaskett said.