The President’s FY 2013 Budget Requests $575.3 Million to Support U.S. Territories and Freely Associated States

Date: February 13, 2012
For more information please contact:
Rebecca Zepeda (202) 208-6974

WASHINGTON, D.C. — President Obama has proposed a fiscal year 2013 budget of $575.3 million for the Office of Insular Affairs (OIA), the Department of the Interior office that strives to empower U.S.-affiliated insular communities and encourage economic activity and growth. The budget request includes $88.0 million in current appropriations and $487.3 million in permanent and indefinite appropriations for fiscal payments mandated by law to U.S. Territories and Freely Associated States.

The President’s budget reflects tough budget choices, cutting costs in order to fund the highest priority requirements, and advancing efforts to shrink Federal spending while being mindful of ongoing commitments.

“The 2013 budget request demonstrates President Obama’s continued commitment to the well-being of the U.S. insular areas while remaining fiscally disciplined,” said Assistant Secretary for Insular Areas Tony Babauta. “The budget proposes strategic investments as we actively pursue economic development initiatives to encourage private sector development in insular areas.”

The request includes $60.3 million for programs that will address a variety of technical assistance and facilities maintenance programs in the U.S.-affiliated island communities, including Guam, the U.S. Virgin Islands, American Samoa, and the Northern Mariana Islands.

The 2013 budget makes noteworthy investments of $5.4 million to pursue increased employment through sustainable and renewable energy strategies, improve the quality and quantity of economic data from the territories, and to support improvements in insular area government management.

The 2013 budget proposes $3.0 million to control the invasive brown tree snake on Guam, $1.0 million to assist with coral reef conservation, and $22.8 million to support the operations of the American Samoa Government.

Current mandatory appropriations of $27.7 million will continue to be used to undertake capital improvement projects (CIP) that create economic opportunity in U.S. territories and improve the quality of life in those communities. With these funds, American Samoa is scheduled to receive $9.9 million in CIP funding; the Commonwealth of the Northern Mariana Islands, $8.7 million; Guam, $6.1 million; and the U.S. Virgin Islands, $2.9 million.

Permanent appropriations for 2013 include $248.0 million in payments to Guam and the U.S. Virgin Islands. It is estimated Guam would receive $53.0 million in taxes collected in the territory via the IRS ”mirror” code that are by law transferred to the Government of Guam to support its public safety, health care, education, and other services and operations. The U.S. Virgin Islands is scheduled to receive an estimated $195.0 million for Federal taxes collected on distilled spirits in the territory that are by law transferred to the local government to support its operations.

The budget also includes $238.9 million in payments to the Freely Associated States under the Compact of Free Association legislation, including $68.0 million for the Republic of the Marshall Islands, $106.9 million for the Federated States of Micronesia, $34.0 million for the Republic of Palau, and $30.0 million for Compact Impact. The Compact requires the United States to provide regional defense and security for the Freely Associated States as well as economic and social development and financial assistance for their governments.

On September 3, 2010, the United States Government and the Government of Palau successfully concluded their review of the Compact of Free Association and signed a 15-year extension agreement that includes a $250.0 million package of assistance through 2024. Under the agreement, Palau committed to undertake economic, legislative, financial, and management reforms. The conclusion of the agreement reaffirms the close partnership between the United States and the Republic of Palau. The legislative proposal transmitted to Congress on January 14, 2011 is expected to be enacted prior to the implementation of the 2013 budget; therefore, OIA is not requesting current appropriations for Palau Compact assistance in 2013.


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