Monday, July 23, 2018

Puerto Rico fiscal board delivers 1st annual report to US Congress

By on August 1, 2017

SAN JUAN – Puerto Rico’s financial control board said Tuesday that its first annual report to the U.S. President and Congress does not call for the elimination of federal social assistance programs in the commonwealth.

“On the contrary, the proposal included in the report only suggests that particular exemptions to those programs are allowed in order to provide the government of Puerto Rico with the needed flexibility to make reforms that will incentivize work and increase labor force participation in the Island, while safeguarding the necessary assistance for the citizens who need it most,” the board said.

The statement comes a day after the entity created by the federal Promesa law issued a report detailing the progress it has made in its first year of work.

As part of the document, the board made a series of recommendations to Congress for actions that could aid in Puerto Rico’s fiscal recovery. The list of initiatives included economic development, healthcare funding and a comprehensive overhaul of the commonwealth’s benefits programs that would increase labor-force participation and conditions, according to the board.

Fiscal Oversight & Management Board (Juan J. Rodríguez/CB)

The board urged Congress to grant Puerto Rico waivers to convert federal welfare funding for the Supplemental Nutrition Assistance Program (SNAP), the Temporary Assistance for Needy Families (TANF) program and the Section 8 housing voucher program into an earned-income tax credit.

The seven-member panel believes this will incentivize workforce participation, while maintaining a responsible safety net for children, people with disabilities and seniors. It also proposes having the Health Resources and Services Administration utilize the Puerto Rico Community Survey when allocating funds to the island under the Maternal, Infant and Early Childhood Home Visiting Program.

The fiscal board also urged Congress to refrain from amending Promesa because it would detract all parties from doing their work, including carrying out its own duties to balance the island’s budgets, restructure its debt and achieve economic growth.

In the report, the board also asked Congress to remove regulation that restricts cargo commerce between Puerto Rico and other markets, and to direct relevant agencies to support bankable infrastructure projects through reduced red tape, targeted investments and increased access to credit.

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It also said Congress must encourage the U.S. Army Corps of Engineers and Enlace (acronym for a local partner corporation) to finalize the partnership agreement for the Martín Peña Channel ecosystem restoration project.   

Puerto Rico’s fiscal board also asked that the U.S. Labor Department to partner with the commonwealth to act as a test bed for the expansion of apprenticeship programs to link education with marketable skills and employment; to encourage the Department of Homeland Security to lower the required investment to qualify for the EB-5 (employment based) Immigrant Investor Visa Program relative to states to reflect Puerto Rico’s needs; and to encourage the National Science Foundation to collaborate with all possible stakeholders to avoid decommissioning the Arecibo Observatory.

The board further advised Congress to establish a Manufacturing USA institute on the island to preserve Puerto Rico as a pharmaceutical manufacturing center and it also requested having the Commerce secretary appoint at least one member with expertise in Puerto Rico tourism to the U.S. Travel and Tourism Advisory Board.  

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The report asked that the Community Development Financial Institutions Fund website update its maps to represent visually that Puerto Rico is eligible for its program. It also includes technical assistance requests for such matters as centralizing the online government portal, improving tax enforcement, strengthening credit unions, to “streamline” Puerto Rico Electric Power Authority operations and make General Services Administration contracts more accessible.

The report, moreover, urged Congress to direct the Census Bureau and other federal agencies to include Puerto Rico in federal statistical programs on the same basis as the states.

A matter of status

Gov. Ricardo Rosselló publicly opposed Tuesday that the benefit programs be altered because these help the island’s most vulnerable sectors. However, he does believe that establishing a “transition from the welfare state toward employment” without affecting benefits is necessary.

The possibility that social benefit programs be reduced or that work days be cut for public employees, which the government opposes but the fiscal board could require, is due to Puerto Rico’s colonial situation, Rosselló stressed.

“I believe that supporting or promoting a furlough and at the same time support the elimination of these benefit programs is totally inconsistent. As you reduce work hours, you are not protecting workers, you are taking a series of actions that are inconsistent and that cannot be carried out in any other U.S. jurisdiction,” the governor said during a press conference.

He insisted on the need to request the island’s admission as a U.S. state because it would be how Puerto Ricans could benefit from social programs and proposals such as the Earned Income Tax Credit (EITC) would be “automatically there.”

“Why are we talking about taking away some benefits that exist in other states, while we don’t have the Earned Income Tax Credit either, which is an incentive to work? Because we are a territory, a colony. That’s why these things that are standard in the states can be changed,” the governor assured.

See the fiscal board’s report to Congress.



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