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Governor: $58 million available for Puerto Rico teacher, police pay raise

By on March 6, 2018

SAN JUAN — Gov. Ricardo Rosselló explained Tuesday that the money to finance the $1,500 annual pay raise for teachers and police officers, he announced in his State of the Commonwealth address Monday evening will be obtained via savings from the Education and Police departments’ restructuring.

Rosselló told the media that the wage hike for teachers would have a cost of roughly $38 million, while the raise for officers would be around $17 million to $20 million.

“It’s important to emphasize that we are getting this money from the same agency, from restructuring the same agency,” the governor said at a press conference held in La Fortaleza.

Rosselló said the consolidation of Police stations and administrative functions are some of the measures that would produce the savings needed to provide the raise.

“We found the way to cut costs…and we decided to invest in the Police,” he said. “We are changing the Police structure so it functions better.”

During his second annual message Monday, the governor also announced that the sales and use tax (IVU by its Spanish acronym) on prepared food would drop from 11.5% to 7%. He explained Tuesday that the fiscal impact of this measure would “depend on how it is executed, between $60 [million] and $78 million.”

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Rosselló explained that the lost IVU revenue would be covered by “the Incentives Code transition,” “efficiencies we are seeking” and “other technical initiatives that are being worked on, as well as “other measures” that are being discussed with the island’s fiscal oversight board.

During his speech Monday, the governor mentioned tax reform but did not give details about when he would introduce a bill.

“More competitiveness, fewer taxes, incentives to work, and world-class preparation are the ingredients to achieve a productive Puerto Rico and change the chronic condition of labor participation forever,” the governor said in his annual speech.

Regarding the incentives to work, when asked by Reorg Research about the Earned Income Tax Credit, he said there is an estimated $150 million to $200 million.


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