It ’ s 2006 , Can This Really Be Happening ...
The Down-Spiraling Deficit of Puerto Rico
By : Marti Lopez
SAN JUAN , Puerto Rico - Puerto Rican lawmakers failed to resolve the U . S . commonwealth ’ s budget impasse on Monday , May 1 , 2006 causing a partial government shutdown that has closed public schools and thrown nearly 100,000 people out of work . For almost a year now , legislators and the administration have knocked heads on a plan to balance the structural budget deficit . The dispute peaked the third week of April and had stirred public anxiety , with as many as 50,000 people marching on April 28 , 2006 , around San Juan ’ s Capitol building that is home to the legislature . The statehood party that controls both chambers had favored a 4 percent sales tax while the administration had proposed a 7 percent tax rate . Both measures would distribute 1.5 percent of the consumer tax to towns and 1 percent to paying off debt .
The House on Sunday , April 30 , 2006 , passed a measure calling for a special tax of 5 percent on corporations on the island . But administration officials dismissed that as unconstitutional , saying the bill would violate tax contracts with many U . S . corporations on the island .
The governor and legislature remained at odds . The island currently has no sales tax . Governor Anibal Acevedo Vila said he would agree to a lower sales tax than he had previously said was necessary to secure an emergency line of credit to finish out the fiscal year . A compromise of 5.9 sales tax rate was trying to be worked out , but the Senate and House of Representatives did not offer a proposal .
All 1,600 public schools on the island closed
Monday , two weeks before the end of the academic year , along with 43 government agencies .
Many basic functions of Puerto Rico ’ s government were not available because of the shutdown , which the governor said was necessary because the island did not have enough money in its budget to get through the fiscal year ending June 30 .
The island closed 43 government agencies and the public schools , granting an unscheduled holiday to 500,000 students - and leaving many parents suddenly without a paycheck .
“ I have to find some other way to support my family ,” said Americo Santiago , 38 , a government-employed laborer in the central mountain town of Jayuya . The government is Puerto Rico ’ s largest employer , with some 200,000 workers . Salaries make up about 80 percent of the government ’ s operational costs . The shutdown - - the first in Puerto Rico ’ s history - - happened despite last-minute attempts by Acevedo and lawmakers to agree on a bailout plan .
Puerto Rico is saddled with a $ 740 million budget shortfall because the governor and lawmakers have been unable to agree on a spending plan since 2004 . Conflicting sales tax proposals have been floated that would allow the island to secure a line of credit so it could pay public salaries through June 30 . Acevedo had insisted that a 7 percent sales tax was necessary to pay for an additional $ 640 million loan . Anything less than 7 percent would only postpone the crisis until July 1 , when the next fiscal year begins , he said . The governor now says he would be
BizBlock
willing to accept a 5.9 percent sales tax — the amount offered under one Senate proposal . Leaders in the House of Representatives said they would support only a 4 percent sales tax . Members of the New Progressive Party , which controls the legislature , have blamed the governor for the crisis . The two sides never agreed on the 2005 or the 2006 budgets , and the government is using the 2004 budget to operate as debts pile up . Two words come to mind : shame ; disgrace . What a shame that there has been such poor planning and mishandling of money , and what a disgrace has been afflicted to our ancestors , to our relatives who depend on these monies to live day by day .
If you would like to contribute to a fund to help the families afflicted by the mass lay-off of government employees in Puerto Rico , a fund has been set up through Banco Popular . Checks can be made payable to : Relief for Government Employees of PR and their Families . Or for more information on how you can help , please contact our office at ( 813 ) 901-5292 .
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