Wednesday, July 8, 2020

Fiscal Board: Government can provide towns $185 million to offset revenue loss caused by pandemic

By on May 13, 2020

SAN JUAN– The Financial Oversight and Management Board for Puerto Rico announced Wednesday that it authorized a $185 million short-term liquidity facility to help the island’s 78 municipalities “offset the timing of expected receipt of property tax revenue” due to the COVID-19 pandemic. 

The facility would be made by the central government to the Municipal Revenue Collection Center (CRIM by its Spanish acronym), which pays monthly remittances to the municipalities based on property tax collection revenues. CRIM extended the tax filing due date of personal property tax returns to provide taxpayers cash flow relief because of the pandemic.

The liquidity facility “will make it possible for CRIM to advance monthly remittances to the municipalities for the months of May, June and July viable,” the board said in its news release.

With this facility, the board said it and the government “ensure that municipalities can continue to provide their important services to the people of Puerto Rico” amid the COVID-19 emergency. 

“The Oversight Board understands that tax collections since the month of March have declined significantly as a result of measures taken during the pandemic,” said board Executive Director Natalie Jaresko. “We all know how important municipalities are in Puerto Rico and the Oversight Board remains committed to help find fiscally responsible ways to overcome the challenges municipalities are facing today.” 

The board provided the authorization, draft liquidity facility agreement and draft legislative text to Gov. Wanda Vázquez Garced and the Fiscal Agency and Financial Advisory Authority (AAFAF by it Spanish acronym). The resolution authorizing the use of Commonwealth funds requires the approval of the Puerto Rico Legislature, and the board said it “hopes the facility will be approved as soon as possible and in time for the May 15 payroll.”

The facility would be available through July 31 and, “based on estimated property tax collections, is expected to be fully repaid by November 30, 2020,” the release concludes.

Also Wednesday, the board endorsed a measure authored by House Speaker Carlos “Johnny” Méndez Núñez and Rep. Antonio Soto Torres, which orders the Treasury to pay in full the refundable personal compensatory credit for people over 65 for the 2016 and 2017 taxable years, resulting in an additional payment of $ 200.

“Today afternoon, we received the notification of the Board endorsing Joint House Resolution 687, which does justice to people 65 years of age or older, granting them an additional $200.00 for taxable years 2016 and 2017. This will impact 140,000 citizens directly and help them in this health crisis caused by COVID-19. We are talking about around $56 million in bonuses being sent to our older adults,” the speaker said in a statement.

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