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Call to include territories in Trump’s proposed $1T infrastructure funding

Interior Department’s acting assistant secretary for Insular Areas, Nikolao Pula
fili@samoanews.com

Lists of priority infrastructure projects from governors of four U.S territories — including American Samoa — have a total cost of over $1 billion, says Interior Department’s acting assistant secretary for Insular Areas, Nikolao Pula in testimony last week before a congressional panel.

The two-hour hearing, streamed online, on “Improving and Expanding Infrastructure in Tribal and Insular Communities” by the House Subcommittee on Indian, Insular, and Alaska Native Affairs included a call from the panel to include the territories and tribal communities in US President Donald Trump’s proposed $1 trillion in funding for the nation’s infrastructure.

For the insular areas, Pula explained the mandatory Capital Improvement Project program funding annually is set at a total around nearly $28 million, to fund priority projects proposed by island governments for funding. American Samoa, Guam, Northern Mariana Islands and U.S Virgin Islands qualify for CIP, while Puerto Rico does under a separate federal entity.

For the current fiscal year 2017, total CIP allocation is $27.72 million, with just over $9 million each for American Samoa and CNMI; $5.91 million to Guam and the U.S Virgin Islands gets $2.78 million.

Pula revealed that OIA has received a list of “capital improvement needs” from the governors of the four territories and it “amounts to over $1 billion.” Pula didn’t provide any specific examples of improvement needs for the territories but the subcommittee requested a copy of each list from the territories.

Reading from his written statement, Pula told the congressional panel that much of the public infrastructure in the territories is well used and difficult for the small communities to replace or upgrade.

“Overall, the territories’ school facilities average forty years of age, and show the marks of generations of school children and the effects of the tropical climate,” he said, adding that the governors’ top priorities calls for new and replacement infrastructure.

And includes hospitals in American Samoa and the US Virgin Islands; high schools in Guam and enlargement of the landfill in Northern Mariana Islands.

“Aging infrastructure can create risks to human health, a diminishment of educational opportunities for youth, and a less than desirable environment for cultivating tourism and investment in territorial economies,” he said.

In her remarks, Guam Congresswoman Madeleine Bordallo told the subcommittee that the territories “face challenges with infrastructure projects and the needed resources and many times we’re not included in federal funding opportunities, or formulas, that don’t truly recognize our needs.”

She also pointed out that the long distance to travel from the territories in the Pacific to the U.S mainland “makes it difficult to source materials and often we’re forgotten when it comes to [federal] funding.”

Additionally, the “distance... contributes to the cost of our infrastructure,” she said, adding that funding “has been inadequate.”

“I’m even more concerned with findings” by a recent federal review that “out of about  $80 million in federal infrastructure funding available to the territories, only about $20 million was utilized last year” for the four territories, she said.

“At the time when our [island] governments are financially strained, those resources could have been used for capital improvement projects that have been stalled due to the lack of funding,” she said, and clarified that that $20 million was divided among the four territories. She hopes that OIA and federal partners help the territories “so we can better utilize federal opportunities.”

Bordallo asked, how is DOI, working within the administration, going to “consider funding for the territories and ensure we are included in the increases in funding as the Trump Administration plans much much more money for infrastructure?”

Pula first acknowledged that Bordallo “is absolutely correct, about the needs and the demand for the US territories for years and the limited funding” through the CIP monies.

Regarding Trump’s infrastructure funds, “it’s too early to say anything about how that’s going to develop,” Pula said. “But we’re working within the department and also with the list provided by the governors, hopefully as time goes on, it’s fleshed out what we will be able to do some work in that regard for the territories.”

Bordallo responded, “I hope your voice is going to be loud and clear for the territories.”

Commonwealth of the Northern Mariana Islands Congressman Gregorio Kilili Camacho Sablan pointed out that Trump promised a $1 billion infrastructure fund in his address to Congress early this month and it’s “our job is to make that the US insular areas and Indian countries — the tribal communities — participate fully in the president’s plans.”

“Insular and tribal people are among the nation’s poorest. And the key to raising standards of living and developing our economies is first-rate infrastructure,” he said, adding that the hearing “can establish a strong record for what our infrastructure needs are, so that when the President’s proposal is legislated this Subcommittee will be able to advocate for the islands and tribes.”

In response to a question from Puerto Rico Congresswoman Jennifer Gonzalez-Colon on current estimated costs of capital improvement needs in the territories, Pula referred to the over $1 billion total based on the list from the governors of the territories.

Pula recalled, about 20 years ago, that the U.S Army Corps of Engineers conducted an assessment of infrastructure needs of the territories at the time “and it was like around over $600 million, so now it’s up.”

Gonzalez-Colon noted Pula’s opening remarks about the two goals of the CIP program — assist territorial governments with infrastructure funding, and encourage improved financial management by the territorial governments. “Is there any aspect of the program that needs improvements?” she asked Pula.

The DOI official explained that base level funding was established in 2005, utilizing historic CIP trends with an overlay of the competitive allocation system requirements. The allocation system was adjusted for fiscal year 2012 and again for 2017. Additionally, there is only about $28 million annually in mandatory CIP funding.

“Historically, because CNMI and American Samoa are the smaller communities, Guam  and the Virgin Islands have better economic activities and much larger, we provided about $9- $10 million [each] for American Samoa and CNMI, while the rest divided [between] Guam and Virgin islands,” he said.

“When we develop the [goals] to assist them, within the base line that we usually set every five years, the territory could improve their financial management — in terms of getting their single audit clean, providing them on time... and the improvements of their financial systems,” he said.

Besides “this money, do you need anything from this committee?” Gonzalez-Colon asked to which Pula replied, “Think everybody here needs money.” (The others testifying at the hearing are four officials representing the tribal communities in the U.S.)

“It’s not just the infrastructure,” he said, “the economic base of the Indian countries as well as the territories thrives on these infrastructures in many ways.”

For example, when the incentives are being taken away — such as federal tax incentives like Section 936, the territories miss those opportunities to have their activities, he said.

(Section 936 had benefitted the local canneries and the Lolo Administration, along with Congresswoman Aumua Amata are working to not only reinstate this tax benefit but any other tax incentive to benefit U.S businesses operating in American Samoa.)

In the U.S. Virgin Islands, with their “rum fund” incentive, which is an economic activity helping that island, he said, adding that the other territories don’t have such an economic activity, so it doesn’t really help them.

Towards the end of the hearing, Bordallo told Pula that, “we do move forward with more investments in our infrastructure and that the territories will be fully included in these plans.”

“Specially I hope any infrastructure bill will also include funding to address access to broadband and for expanding the IT and telecommunication economies in the territories, which bring enormous potential economic benefits to the islands,” she said.

Bordallo asked if OIA funds broadband infrastructure in the territories and Pula replied, that CIP money funded the laying of a fiber optic cable and in the past based on the request from the governors. “If that’s their priority, it’s allowable or have been done through CIP,” he said.

Samoa News notes that $3 million in CIP money funded ASG shares to the American Samoa Hawai’i Cable, the fiber optic cable connecting American Samoa to Hawai’i.

(See Samoa News last Friday on Congresswoman Aumua Amata’s comments at the hearing.)