--Instances when federal programs were unevenly extended, did not recognize local conditions, or established an administrative burden not anticipated for the territoSome examples cited included programs for the ries. elderly, food stamps, and welfare. TERRITORIES ARE HEAVILY RELIANT ON FEDERAL ASSISTANCE The United States has spent millions to build an economic base in each territory and to promote economic development. Infrastructure projects, such as schools, hospitals, roads, utilities, and other facilities, have been provided. In addition to cash and program grants and loan guarantees, the U.S. has given the territories special tax treatment and provided various trade incentives, such as duty free access of Many goods into the United States to support internal develop- ment of and the achieve greater economic self-sufficiency. territories Many corporations are generally exempt also receive generous from federal tax benefits. Residents taxation. Some ter- ritories receive other tax advantages which increase their revenue base, For example, federal excise taxes collected on rum and other selected goods produced in Puerto Rico and the Virgin Islands are returned to the local governments--$279 million and $35 million in fiscal year 1983, respectively. In Guam, federal income taxes paid by U.S. military personnel are returned to the local treasury. In fiscal year 1983, about $21 million was rebated to Guam. Despite these efforts the territories remain heavily dependent on federal financial assistance. As shown in table 2, except for Puerto Rico, federal assistance as a percentage of total revenues in fiscal year 1983 ranged from 33 percent in the Virgin Islands to 72 percent in the NMI. The other Micronesian States of the Trust Territory were even more reliant on federal funding--85 percent in fiscal year 1983. If territorial taxes an indirect considered are taxes income federal of paid in lieu subsidy, the degree of assistance is even higher than the table indicates. 23 5000230 |