Puerto Rico is back in the spotlight again with bad economic tidings and little holiday cheer.
The island is expected to run out of money for its government payroll possibly in February, meaning Puerto Rico is broke for all intents and purposes.
The annual budget deficit is expected to be more than $67 billion over a 10-year period, or $10 billion higher than originally stated and nearly as much as the island and its public agencies owe bondholders.
Money for pension payments to teachers and other retirees is expected to hit bottom out in six months. No money in the till.
The 10-year long economic recession is projected to continue in fiscal 2017, during which the economy is expected to contract another 2.3 percent – more than in any fiscal year since 2011.
As if that weren’t enough, Puerto Rico’s latest population estimate is just over 3.4 million, a loss of over 300,000 people since 2010. Plus, the numbers continue to decline, mostly due to migration.
No Way Out
There is no way to paint a pretty picture. Not even the latest beauty queen Miss World Stephanie Del Valle is going to fix what ails Puerto Rico. There is no way out except for a strong dose of economic chemotherapy.
The much dire financial outlook is likely to have a continuing impact on Central Florida, as migrants seek economic opportunities elsewhere. The Orlando area is the No. 1 destination for Puerto Ricans fleeing the island.
Because outgoing Gov. Alejandro García Padilla didn’t act more aggressively in containing the financial hemorrhaging, the crisis became more acute and the response is going inflict even more pain. But he couldn’t bring himself to do it.
In the last budget he presented, the governor cut expenses for fiscal year 2017 by only $700 million. In fiscal 2016 the government cut only 3,400 jobs. Fewer than 900,000 people officially work on the island, according to the Puerto Rico Planning Board.
Work To Be Done
The work to be done now falls to Gov.-elect Ricky Rosselló and the fiscal control board that was appointed to make all economic decisions on the island.
• Government layoffs – not just the central government but also municipalities (Puerto Rico has 78 of them!). The incoming new administration of the town of Toa Baja, just outside of San Juan, disclosed that the municipality is carrying $100 million in debt.
• Privatizing or selling of assets – ports, infrastructure, you name it.
• More cuts – in education and an already bankrupt health care system.
• Tax, labor and energy reforms – to help stimulate the economy.
˜˜Maria Padilla, Editor