Monday, March 30, 2020

Puerto Rico Governor Announces $787 million Relief Package Amid Covid-19 Outbreak

By on March 23, 2020

SAN JUAN — Calling it the most comprehensive financial relief package offered yet by any state, Puerto Rico Gov. Wanda Vázquez Garced announced Monday economic incentives to mitigate the effects of the coronavirus pandemic on workers and companies on the island.

“Guaranteeing social stability depends largely on how we articulate an economic plan that allows us to respond to this crisis, protecting our families and the productive sectors of Puerto Rico,” Vázquez said.

Among the measures, the governor said 134,200 workers from public agencies and corporations would continue to get paid.

“We have urged mayors to do the same so that we can protect the income of 51,500 employees who work in our municipalities,” Vázquez said.

Regarding private-sector employees the 170,000 self-employed, which includes 19,000 farm workers and 44,000 in construction, manufacturing and agriculture industry, the governor said that “our government is committed to workers and businesspeople. We will do everything we have to do to prevent this emergency from having further effects on the…productive sector. ”

“Let there be no doubt that I will use all my constitutional powers to guarantee that the most vulnerable have their social security and are not left unprotected,” she added.

The financial aid and incentives package was achieved after discussion between representatives of the private sector, her economic team and the Financial Oversight and Management Board for Puerto Rico.

In a first, the governor was accompanied during the press conference by the board’s chairman, José Carrión, and executive director, Natalie Jaresko.

Vázquez announced that the island’s 11.5% sales tax won’t be charged for three months and that public employees will continue to get paid. Self-employed people, she said, would be sent a check for $500, while nurses will receive up to $4,000.

A 90-day moratorium on mortgages, auto loans, personal loans, business loans, and credit cards has been established, including for credit union customers, all of whom must be request the deferment from their financial institution because it is not automatic.

In addition to financial aid for health workers and the police, the governor announced a personal and commercial loan moratorium, including mortgage and credit card payments. Water and electricity services will not be cut either.

“Given the unprecedented reality Puerto Rico currently faces in light of COVID-19, the Financial Oversight and Management Board for Puerto Rico today authorized the Government of Puerto Rico to use $787 million to fight the COVID-19 emergency. This is in addition to the $160 million from the Emergency Reserve fund already authorized,” the board said.

The board said in measures are:

  • $237 million in one-time bonuses for public and private nurses, technicians, emergency medical services personnel, correction officers, and other Public Safety Department (DPS) staff in the front lines of the fight against COVID-19
  • $50 million for investments in hospitals and public safety, to restock medical supplies and invest in equipment for a period of at least two months
  • $160 million in one-time direct payments to self-employed individuals and small businesses whose incomes have been affected by the disruption of their work and income 
  • $240 million for the Department of Education to support and enable online learning while schools are closed, to buy tablets for every student and teacher, and provide teachers and students with software and training
  • $100 million for municipalities, providing support for lost revenues over the next two months as a result of the emergency measures implemented to fight COVID-19

In addition, the board and the government agreed to “immediately begin to accelerate an increase in unemployment benefits, which was previously scheduled to start on July 1, 2020,” the board said in a release.

“The Oversight Board’s singular focus right now is on supporting the Government of Puerto Rico in helping to protect the people from the COVID-19 virus, and to minimize and contain the pandemic here,” Carrión said. “In moments like this, it is most important to look for significant and reasonable fiscal policy solution for those fighting this virus and for the health and safety of Puerto Rico overall.” 

The board added that it presented Monday a motion in U.S. District Court for the District of Puerto Rico to adjourn consideration of the proposed commonwealth Plan of Adjustment’s disclosure hearing until further notice. 

“We support the initiatives presented by the Governor and the Fiscal Control Board, because now more than ever we need to revitalize our economy with funds for small businesses, that our students continue their education, provide with tools to our workers who are in the first line of response to # COVID-19 like our nurses,” Resident Commissioner Jenniffer González Colón said in a statement from Washington, D.C., in reaction to the governor’s message. 

The aid announced, the congresswoman said, demonstrates that “we can “bridge the differences” and “seek alternatives for the common good” of Puerto Rico.
 
“This initiative joins the efforts of President Trump and Congress to seek relief for our economy. I continue fighting for Puerto Rico to continue to be included in the federal stimulus package,” she added.

A break down of some of the economic relief measures announced:

Cash:

  • $500 for self-employed workers 
  • $1,500 for small and midsize business that had to halt operations due to executive order OE-2020-23
  • Up to $4,000 for public and private sector nurses 
  • Up to $2,500 for health technicians 
  • Up to $3,500 for police, firefighters and correction officers 
  • The Labor Department will offer unemployment benefits to freelance workers and workers who are on leave due to the curfew.  

90-Day Moratorium 

  • Suspension of payments for personal and commercial loans as well as mortgages and credit cards (this applies to banks and cooperatives). It is not automatic. People need to inform their respective financial institution.
  • No cuts to electric or water services 
  • No highway toll collection 

Taxes 

  • Income tax payment is postponed until July 15
  • 3 months of no sales tax at the ports or distribution chain 
  • 10% withholding for self-employed workers suspended for 3 months 
  • No penalties will be imposed for non-compliance with the bimonthly IVU withholding for two months; nor will penalties be imposed for non-compliance with the payment of the first installments of the estimated tax return

Purchases 

  • $250 million for tablets, software and training for teachers, students and school directors in the public-school system 
  • $30 million for the purchase of materials in public hospitals (Two disbursements of $15 million) 
  • $20 million for protective gear and materials (masks, sanitizers) for police officers 
  • $50 million for municipalities (Two disbursements of $25 million)

Total: $787 million 

The governor’s announcement comes a week after the executive order that nonessential businesses and the government close temporarily and send employees home as a measure to try to stop the spread of COVID-19.

So far, the government has reported two deaths and 31 cases due to the disease.

A translation of the governor’s speech follows, as sent by her office:

Good afternoon Puerto Rico,

In addition to working on protecting the health and well-being of our people, the care of which is being coordinated by a group of medical experts that we have appointed, at this time of crisis, one of the main concerns of our government is how do we preserve our social stability:

How do we ensure, that when this crisis ends, we have protected the physical, mental, and economic health of our families, our communities, and all our citizens.

We must act quickly to protect our people by asking everyone to stay at home, reinforcing social distancing as a measure of prevention of this outbreak, thus controlling contagion and spread of the virus.

We will continue to provide essential services, like access to supermarkets, pharmacies, gas stations, banks, medical services, which are also being made available through telemedicine, among the other services that are included in our Executive Order.

Now, guaranteeing social stability depends, in large part, on how we devise an economic plan that allows us to respond effectively to this crisis, protecting our families and the productive sectors of Puerto Rico.

First, and foremost, we will continue to pay the wages of public sector employees who are part of the central government.

We are talking about 134,200 workers from agencies and public corporations, that will continue to receive their check during the period of this emergency.

We have urged mayors to do the same so that we can protect the income of the 51,500 employees who work in our municipalities.

Additionally, we will not forget that in the midst of this crisis, workers in the private sector, our largest labor group, is the most fragile. We are talking about 170,000 self-employed workers, which includes 19,000 agricultural workers, and 44,000 from the construction industry.

We know that this public health crisis is affecting business owners, particularly small and medium-sized entrepreneurs, as well as the construction, manufacturing and agriculture industries. It also adversely affects many independent professional workers, mainly linked to the service delivery industry.

Our government is committed to all the workers and employers on the island; therefore, we will do everything necessary to prevent this emergency from having further effects on the private sector. Let there be no doubt that I will use all my constitutional powers to guarantee that the most vulnerable have their social security and are not left unprotected.

For this reason, we have worked on the first series of short-term economic and fiscal initiatives, which will be immediately available:

FIRST, we have instructed the Department of the Treasury to:

•        extend the period of income tax payments until July 15

•        suspend the collection of the Sales-and-Use Tax (SUT) at the docks and the resale chain for the next 3 months

•        suspend for a period of 3 months the 10% withholding at the origin of payments for professional services.

•        not to impose penalties for non-compliance with the fortnightly SUT for two months; nor impose penalties for non-compliance with the payment of the first installments of the estimated tax

•        To help our working class, we will provide an incentive of $500 in cash to all the self-employed workers – an estimated 170,000 people in Puerto Rico.

o   It is a measure to help mitigate any emergency situation anyone may be facing.

o   This benefit for self-employed workers has an economic impact of $100 million and has already been discussed and approved by the Fiscal Oversight and Management Board.

o   This subsidy will begin to be sent starting this week.

•        Likewise, we will continue to monitor the result of the federal stimulus package to look for additional measures.

SECOND, through the Department of Economic Development, we will provide $1,500 as an incentive for all small and medium-sized companies that have ceased operations in the midst of this crisis.

This assistance has an impact of $60 million, and we will follow the same protocol that we established with the aid offered to businesses in the southwest region of the island to mitigate the impact of earthquakes.

For this assistance, we will focus on employers in small and medium businesses, with 50 employees or less, who do not qualify for federal aid.

THIRD, a bonus of up to $4,000 is established for all nurses in the public and private systems and up to 2,500 for health technicians who assist in these tasks. For a total of $187 million.

A contribution of up to $4,000 is designated for medical emergency response personnel and a contribution of up to $3,500 for police, firefighters and correctional officers, among others. For a total of an additional $50 million.

$240 million will be awarded for the purchase of tablets, software, and training for approximately 325,000 teachers, students, and directors of the Department of Education, to promote distance education.

$30 million will be available allocated in $15 million over the next 2 months to assist with the purchase of equipment in public hospitals in an effort to reimburse all purchases related to the response of the emergency Coronavirus COVID-19.

$20 million dollars will be made available for the purchase of necessary equipment for the security of the Puerto Rico Department of Public Safety, meaning the Puerto Rico Police Department, this will include gloves, masks, and hand sanitizers, among other essential equipment.

$50 million has been identified and will be distributed for a period of 2 months for those losses that may have affected the municipalities due to this emergency. The government will establish the necessary requirements to access this funding. This represents a total of $787 million, this will go directly to the hands of the people of Puerto Rico to mitigate the impact of Coronavirus COVID-19.

FOURTH we have reached an agreement with the Fiscal Oversight Board to authorize the increase of unemployment benefits beginning July 2020.

I have also directed there to be no suspension of essential water and electricity services. And to suspend the collection of transportation tolls during this emergency.

FIFTH, the Puerto Rico Department of Labor and Human Resources will coordinate with the Federal Government to offer unemployment assistance for those that are self-employed.  This is important since these benefits, usually, do not cover this sector.

The same will be done for those workers who are ordered to take unpaid leave and do not qualify for unemployment payments or sick leave. The unemployment benefits will be extended to part-time workers who have worked in, at least, two- quarters of the basic period.

SIXTH, as an economic measure, we will promote telework or work arrangements from home throughout the Government by means of the use of technology, whenever possible and while the Executive Order is in force.

For these purposes, it is ordered to all secretaries and agency heads present in the next 48 hours a plan of all those areas that can operate by means of remote work, including the services provided by independent contractors, professional service providers, companies, private suppliers, and non-profit organizations.

It is important to emphasize that using the alternative of teleworking or remote work cannot be interpreted as an exception to compliance with social distancing and curfew, ordered by the Executive Order.

SEVENTH, I take this opportunity to report that, in conversation with the Presidents of the banks, a period of 90 days of moratoriums has been established in the payment of mortgages, cars, personal loans, commercial loans, and credit cards.

This benefit will also be available to members of cooperatives. The only requirement is to call your financial institution and request the moratorium because it is not an automatic process. This is important relief because it represents a direct relief to the workers’ wallets.  It is important to understand that moratoriums do not affect the credit of individuals or companies.

This would be one of the most comprehensive and ambitious relief packages that have been announced to deal with this crisis. These are much more comprehensive measures than those offered throughout the Nation.

For example, California announced a $500 million package and Washington State a $200 million package. We announced a first package of almost a billion dollars for our people on the island, achieved in conjunction with the Fiscal Oversight Board.

We thank the Fiscal Oversight Board, its Chairman José Carrión, and its Executive Director, Natalie Jaresko, for working together on behalf of the people of Puerto Ricans.

Fellow Puerto Ricans: these steps we are taking will help mitigate the economic impact of the current crisis. As this is an ongoing emergency, there are other measures we are currently evaluating and that we will be announced accordingly, in particular those in line with the economy and touristic activity.

Through this difficult moment we face as a nation, we must be united, our enemy is Coronavirus COVID – 19 and together, we will defeat this virus as a nation.

It is our hope that we will move forward during this emergency. Together in solidarity, we will conquer this public health crisis.

We must have present that the health and the protection of  the life of all our citizens is our priority.

Therefore, our priority is the health and welfare of our people, we must continue to protect ourselves and stay home.

THIS BATTLE WILL BE CONQUERED WITH ALL PUERTO RICANS UNITED.

God bless you and all your family.

—Yanira Hernández and María Soledad and Cybernews contributed to this report.

🔴[En Vivo] La gobernadora Wanda Vázquez Garced ofrece mensaje sobre medidas económicas para atajar la situación del COVID-19 en Puerto Rico.

Posted by La Fortaleza de PR on Monday, March 23, 2020

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