Monday, August 19, 2019

Fiscal board: Video-lottery terminal section in tax reform is inconsistent with fiscal plan

By on November 12, 2018

SAN JUAN – The Financial Oversight and Management Board for Puerto Rico said Monday that it has yet to receive the data it needs to determine that the off-casino gaming machines provision in the administration’s tax reform bill will not offset revenue projections.

In his letter to the board last Monday, the director of Puerto Rico’s Fiscal Agency and Advisory Authority (AAFAF by its Spanish acronym) and the governor’s representative to the fiscal board, Christian Sobrino, wrote that the proposed tax reform passed by the Legislative Assembly was consistent with the board-certified fiscal plan and that the inclusion of the video-lottery, or adult-gaming, machine provisions ensure $40 million in revenue from related license fees.

However, the board still requested data that would substantiate that assertion.

“Unfortunately, despite several attempts, the Oversight Board still has not received data supporting the perspective that the video lottery terminal (VLT) provision in the tax bill is revenue neutral and will not cannibalize existing Fiscal Plan revenue streams. The study provided to date does not provide enough confidence to assert revenue neutrality,” board Executive Director Natalie Jaresko said in her statement.

“Until such time as the Oversight Board can be convinced with data and surveys that demonstrate the VLT proposal will not cannibalize existing Fiscal Plan revenues, it is the Oversight Board’s perspective that this portion of the bill is not revenue neutral and remains inconsistent with the Fiscal Plan.

“In addition to providing data that shows the proposal will not cannibalize existing Fiscal Plan revenues, it is also important the bill text accounts for the full costs of implementation, operations, and regulations from the proposal. To best ensure revenue neutrality, operators of VLTs should be responsible for paying those costs, not the government,” her statement concluded.

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