V.I. Plans for Spending $39.5 Million Medicaid Windfall

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Acting Finance Commission Kirk Callwood and Acting Budget Director Jenifer O'Neal discuss plans for a budgetary windfall at Tuesday's Finance Committee hearing. (Photo by Barry Leerdam, V.I. Legislature)
Acting Finance Commission Kirk Callwood and Acting Budget Director Jenifer O’Neal discuss plans for a budgetary windfall at Tuesday’s Finance Committee hearing. (Photo by Barry Leerdam, V.I. Legislature)

Spending plans for a big Medicaid windfall and authorization of an $80 million revolving line of credit for the V.I. government moved forward a step when senators voted two bills out of the Finance Committee Tuesday.

The federal Medicaid windfall, some $39.5 million, came to the territory after an audit of cost reports for 2011-2013, acting Budget Director Jenifer O’Neal told the committee.

The executive branch wants to use the money immediately to shore up some outstanding V.I. government bills, debts owed by the territory’s hospitals and to the hospitals, among other things.

Acting Finance Commissioner Kirk Callwood said the funding was ready to go.

The bill calls for:

– $8.7 million to the Department of Labor to pay outstanding workman’s compensation insurance, with $6.5 million for Schneider Regional Medical Center and $2.2 million for Gov. Juan F. Luis Hospital.
– $9.9 million for JFL, to be paid directly to the Water and Power Authority for outstanding bills;
– $4.3 million for Schneider ‘s WAPA bills.
– $2 million to the Department of Health for behavioral programs to be divided equally between the two V.I. districts.
– $3 million to the Waste Management Authority for outstanding vendor payments.
– $5 million for outstanding taxes JFL owes the V.I. government.
– $4.5 million to help pay recent salary increases.
– $2 million split between districts to fund a list of smaller projects and purchases.

O’Neal said the $5 million for JFL’s taxes would immediately be used to pay outstanding refunds from tax year 2016. The funding for unemployment insurance would also benefit WAPA, she added.

Sen. Alicia Barnes (D-STX) asked what the total amount WAPA was due to receive as a result of this measure. O’Neal said the total to WAPA was around $22 million, which was destined to help pay a single $40 million debt.

Sen. Allison Degazon (D-STT) questions Callwood and O'Neal at Tuesday's Finance Committee hearing. (Photo by Barry Leerdam, V.I. Legislature)
Sen. Allison Degazon (D-STT) questions Callwood and O’Neal at Tuesday’s Finance Committee hearing. (Photo by Barry Leerdam, V.I. Legislature)

Sen. Allison Degazon (D-STT) asked whether, “in light of the fact we are anticipating the loss of excise tax revenue” and may face a budget gap, if this was the best use of the funds. Federal courts recently shut down the V.I. government’s collection of excise tax, potentially costing tens of millions of dollars per year.

“Yes,” Callwood said. “It’s really about implementing a multiplier effect,” by helping several agencies and WAPA with their financial picture and get the money flowing in the economy, he said.

They don’t know where the excise tax situation will go “but to have almost $40 million just sitting instead of going through the economy, I’m not too fond of that,” Callwood said.

For St. Croix, the smaller spending items are:
– $200,000 for mental health services for the Department of Education’s students and staff.
– $125,000 to the Department of Sports, Parks and Recreation for garbage trucks.
– $105,000 to the Department of Human Services for the purchase of vehicles for the Meals on Wheels program.
– $150,000 to the Legislature for the youth summer employment programs.
– $420,000 to Bethlehem House for retrofitting.

On St. Thomas, the spending items are:
– $200,000 for mental health services for the Department of Education’s students and staff.
– $150,000 for the Department of Sports, Parks and Recreation for playground equipment for Alvin McBean Ballpark.
– $125,000 for the Department of Sports, Parks and Recreation for garbage truck and other equipment.
– $150,000 for an as-yet to be staffed Tax Study Commission.
– $120,000 to Eldra Schulterbrandt Facility for two passenger vans.
– $105,000 to the Department of Human Services to purchase two vehicles for the Meals on Wheels program.
– $150,000 to the Legislature for the youth summer employment programs in that district.

Senators also sent out of committee a bill authorizing an $80 million revolving line of credit to be paid back with federal disaster relief funds. The money would be used to pay contractors now, pending receipt of federal funds.

Many contractors have had to wait for payment as the federal procurement process plays out slowly. The bill says in its introduction the money is partly to help reduce those delays.

While the territory has not been able to make long-term bond issues in recent years, Callwood said there is a market for this debt, secured by future aid dollars. But the territory would have to finance the interest on the loan and needed to get approval from federal agencies before proceeding, Callwood said.

Also, the territory has to confirm the taxable assessed value of real property in the U.S. Virgin Islands, to clarify the territory’s debt ceiling, he added.

Voting to send both bills out of committee were: Degazon, Sens. Marvin Blyden (D-STT), Javan James (D-STT), Athneil “Bobby” Thomas (D-STT). Kurt Vialet (D-STX) and Donna Frett-Gregory (D-STT). Sens. Oakland Benta (D-STX) was absent. Sen. Alicia Barnes (D-STX) attended the hearing but is not a member of that committee.

Original Source: https://stjohnsource.com/2019/05/08/v-i-plans-for-spending-39-5-million-medicaid-windfall/