US Virgin Islands Could Lose $100 Million Due to Sequestration: Report

By: Caribbean Journal Staff - March 3, 2013

Above: USVI Governor John de Jongh (Photo: OG)

By the Caribbean Journal staff

The US Virgin Islands could lose $100 million in federal funding by fiscal year 2021 due to the federal sequestration spending cuts that became official this week.

The $100 million number came from a Bureau of Economic Research report.

“Sequestration is a blunt approach to deficit reduction that will cause unnecessary economic harm across the country just as we emerge from a severe recession,” de Jongh said in a release. “This plan is not an effective means to reduce the federal deficit because it threatens our country’s and our territory’s fragile economic recoveries.”

The automatic spending cuts kicked in after US lawmakers failed to make a deal to avert them. They were the result of the Budget Control Act of 2011.

The cuts could mean a loss of more than $10 million in federal aid each year, though that number is dependent on congressional legislation, the report said.

The cuts will reduce funding to the USVI’s Department of Education by $2.6 million, along with a $1.7 million funding cut to the Department of Human Services and a $1.6 million reduction to the Public Works Department.

The USVI’s Department of Health could also see a $1.47 million reduction.

De Jongh said that, while it remained “critical” to reduce the federal deficit, the automatic cuts were “not a viable deficit reduction strategy.”

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