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Over $300M combined budget for Puerto Rico economic development agencies

By on June 10, 2017

SAN JUAN – The economic development components of the Puerto Rican government presented to the Senate Finance Committee their recommended budgets for the coming fiscal year, which totaled more than $310 million.

During the third day of public hearings to evaluate the budget submitted by Gov. Ricardo Rosselló to the Legislature, the officials of their respective agencies explained how they will try to offer better services to citizens, promote economic development and transform the government into “an enabling entity for doing business.”

Economic Development Secretary (DDEC by its Spanish initials) Manuel Laboy itemized the consolidated budget of the department he leads, which totals $91.7 million. The amount represents an increase of $12.7 million compared with the current fiscal year.

The resources originate mostly from federal funds ($79.4 million) and the agency’s own revenue ($9.4 million). When considering what it will get from the local Treasury Department’s general fund, the DDEC will receive about $2.8 million, or about $650,000 less than what it was allocated this fiscal year.

“That increase corresponds to the addition and subtraction of the savings we achieved as part of the executive orders that have been complied with in payroll reduction and [government appointed, or] trust contracts. But the positive balance corresponds to the increase in federal funds,” Laboy explained to committee Chairwoman Migdalia Padilla.

Manuel Laboy, secretary of the Puerto Rico Department of Economic Development and Commerce (Juan J. Rodríguez / CB)

The head of the island’s economic umbrella stressed that to achieve development, it is essential to promote teamwork within the agencies under his supervision, among them the Industrial Development Co. (Pridco) and the Tourism Co. (PRTC). He added that recent initiatives such as Enterprise Puerto Rico, the destination marketing organization (DMO), and other structural reforms contribute to the economic progress of the island.

Popular Democratic Party (PDP) Sen. José Nadal brought up the recent change in Puerto Rico’s economic growth projections, which estimate a nearly 4% decline. “Regardless of whether the economic downturn is 3% or 4%, the economic development plans take into consideration that the coming years are of huge challenges.”

When presenting the budget recommended for Pridco, Laboy stressed that the entity in charge of stimulating economic development by fostering, creating and retaining jobs, as well as attracting capital investment, will only count on $49.2 million for its operations.

Asked about the drastic $130.5 million reduction to Pridco’s budget, Laboy said it is the result of a change in management over most of the money directed toward the special state fund for Rums of Puerto Rico, which is now “going to be under the purview of the Department of the Treasury; therefore, it not counted as part of the budget.”

Puerto Rico fiscal agencies justify budget increases

Meanwhile, the Convention Center District Authority will also see a significant cut to its budget if it were to receive the $31.9 million recommended for the next fiscal year, or about $34 million less than its current budget.

In Tourism Co.’s case, its consolidated budget is of $99.2 million, or about $5.2 million less than the current budget. This includes $53.6 million in the public corporation’s own revenue, $26.9 million in special state funds and $18.7 million in “other revenue.”

Its executive director, José Izquierdo, explained that the total suggested by the executive branch will be aimed at developing an internal tourism campaign focused on promoting local culture, history and gastronomy, as well as a marketing plan and community entrepreneurship, among other efforts.

Other budgetary recommendations presented by the agency heads included $15.4 million for the Trade & Export Co. (CEE by its Spanish initials), $8.9 million for Land Administration and $3.1 million for the Equestrian Sport and Industry Administration.

Agriculture cuts its budget

Moreover, Agriculture Secretary Carlos Flores presented a recommended consolidated budget of $50.9 million, which indicates a cut of about $2.9 million compared with the budget allocated for the current fiscal year. However, the official assured that the decision “does not prevent the department” from conducting its operations.

 

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