Governor deJongh responds to Senator LeMieux's amendment to alter the rum excise tax cover-over program

March 4, 2010

LeMieux Proposal Transfers U.S. Virgin Islands’ Revenue to Puerto Rico Government

Statement from John P. deJongh, Jr., Governor, United States Virgin Islands

Senator LeMieux of Florida today ignored almost 100 years of federal precedent and clear Congressional intent by filing an amendment that drastically alters the rum excise tax cover-over program. His amendment would severely harm the economy of the U.S. Virgin Islands and overtly favors Puerto Rico.

Senator LeMieux’s amendment looks like it was developed alongside Puerto Rican lobbyists. The proposed amendment takes excise tax revenue paid by U.S. Virgin Islands rum makers on rum produced in the U.S. Virgin Islands and directly transfers it to Puerto Rico’s government coffers. Puerto Rico would end up with billions of dollars generated by rum production in the U.S. Virgin Islands.

As we search for solutions to the economic downturn, America needs smart, thoughtful leadership – not desperate attempts to pander to powerful special interests. Senator LeMieux is directly attacking his fellow Americans in the U.S. Virgin Islands by doing Puerto Rico’s bidding.

We are strengthening the U.S. Virgin Islands’ economy and stabilizing our government’s finances. The rum cover-over is a long-standing and successful economic development program that has provided benefits to the U.S. territories.

Furthermore, the rum cover-over program is of great economic and financial importance to the U.S. Virgin Islands. For the first time, we are making full use of these tools given to us, and we have done so without hurting any other location. I cannot understand why Puerto Rico and certain other interests are determined to hold back and undermine the economic interests and future of the U.S. Virgin Islands.

Senator LeMieux’s plan could cause us to default on hundreds of millions of dollars in bonds, which would stop progress on infrastructure projects and environmental improvements, and would force the government of the U.S. Virgin Islands to the brink of receivership.

By promoting this amendment, Puerto Rico has not only given up any pretense of negotiating their concerns with the U.S. Virgin Islands as we have been asked to do by Congressional leaders, but Puerto Rico now also seems willing to walk away from the long history of friendship and collaboration which has linked America's two Caribbean possessions.

Contact: Michael Hartt - 202.326.1707, Jean Greaux - 340.774.0294