Broad Strokes in State Message
While thousands of Puerto Ricans still struggle to see the light at the end of the tunnel nearly six months since the catastrophic impact of Hurricane Maria, Gov. Ricardo Rosselló used his second State of the Commonwealth address last Monday to make promises he failed to explain how to keep.
He promised a salary increase of $1,500 a year for teachers and police. He promised a tax reform that will guarantee “hundreds of millions in savings” to hardworking citizens. He also promised charter schools, less crime and the end of blackouts.
On the latter, Rosselló announced he finally filed—43 days after broadcasting his intentions—the legislation that lays the foundations for the transformation and privatization of the Puerto Rico Electric Power Authority (Prepa).
“The new Puerto Rico requires a system of generation and distribution of modern, reliable, environmentally friendly and less expensive energy than the current one. The goal is to achieve an energy cost lower than 20 cents per kilowatt-hour [kWh],” said Rosselló, underlining the “exemplary and transparent” regulatory framework that the Legislature must now assess.
Gov. Rosselló also promised a yet-to-be-filed tax reform that will reduce the business-to-business tax “until it is eliminated”; lower the sales & use tax (IVU by its Spanish acronym) on prepared foods to 7 percent from 11.5 percent and remove the impediments to the creation of businesses and incentives for workers through the earned income tax credit.
CDL out of fiscal plan
In a recent roundtable discussion at the governor’s mansion, Rosselló clarified that the island’s access to $4.7 billion through the Community Disaster Loan (CDL) Program is not foreseen in the fiscal plan that the Puerto Rico Financial Oversight & Management Board (FOMB) is set to endorse March 30.
“For purposes of this fiscal plan, we are not considering the disbursement of the loan. We have been waiting for that loan for five months and it has yet to materialize,” Rosselló told Caribbean Business.