Puerto Rico Day of Reckoning Is Here

A crumbling building in historic Old San Juan, a symbol of Puerto Rico’s collapsed finances and reduced public employment. /Maria Padilla

SAN JUAN – People still applaud when their flight lands in San Juan, Puerto Rico. As one plane arrived, a passenger added, “Yo soy boricua” and the remaining passengers picked up the chant, “pa’ que tú lo sepas!”, an age-old chorus Puerto Ricans often sing in praise of themselves.

It’s all good considering the turbulence the island is enduring due to its enormous debt – over $70 billion – and the humiliation of an unelected, congressionally imposed fiscal oversight board whose purpose is to steer the island through its fiscal storm.

Which is to say, down on the ground the going is very rough.

Day of Reckoning

The fiscal year that began in July brought a new reckoning: more proposed cuts in public employment and reforms of government pension plans effective September 1. This on an island  reeling from a decade-old economic recession that has sent hundreds of thousands of Puerto Ricans packing to Florida and elsewhere since 2006, a historic migration.

Newly elected Gov. Ricardo Rosselló is going mano a mano with the Financial Oversight and Management Board over control of government, insisting the personnel cuts are “unnecessary” because the administration has made plenty of adjustments. Some mayors are even talking about civil disobedience.

The fiscal board, meanwhile, filed suit in federal court to force the governor’s hand. The outcome may determine who really is in charge. Huge hint: It’s the fiscal board.

Let’s be clear: Rosselló is attempting to put political distance between his administration and the inevitable shrinking of the government’s size and services. The fiscal board states 135,000 government workers are likely to be affected by a shorter work week, a number so high as to wither the political aspirations of the governor and his political party. In comparison, Florida had fewer than 100,000 full-time state workers, as of 2016.

Employer of Last Resort

For decades Puerto Ricans of all political stripes looked to the central government as employer of last resort – and the politicos gleefully complied. Voters will punish any governor who reverses course, as they have in the past.

Political posturing aside, people know deep inside there is no safe landing. This visitor couldn’t buy a treasury stamp (comprobante) in Dorado because the employee didn’t work Fridays. Plus, many municipal workers – another 55,000 employees – clock fewer hours as budget shortfalls have forced mayors to act.

But, in an absurd move that postpones the inevitable, the legislature declared “dead” a much-talked about consolidation of the island’s 78 municipalities that govern a shrinking population of 3.4 million people. That is more than Florida’s 67 counties and 20-plus million residents. Some mayors are forced to join hands. Several municipalities pitched in to collect the garbage of the town of Toa Baja (pop. 5,685), west of San Juan, one of the island’s most financially pinched. And the forecast is, some municipalities may disappear with or without reform for lack of funds.

In the southwest town of Cabo Rojo, residents must buy the town’s orange garbage bags to help pay for waste collection, a first. No orange bag, no pick up, according to the policy, which also encourages recycling. Certain residents reported that people are throwing garbage to the roadside to avoid buying bags, but this visitor didn’t detect anything out of the ordinary.

Stiff Upper Lip

The average Juan and Juana appears stiff-lipped, even graceful, under pressure as they plug away remembering others whose jobs have already vanished.

Workers, from a public school cafeteria worker and auto rental agent to a restaurant owner, seemed jittery but determined – nervous because they don’t know what’s coming but also determined to see things through.

The cafeteria worker dismissed any worries about losing her job, even though initial student registrations appeared to be down by 30,000. “We’ll see,” she commented. The auto rental agent was cautiously optimistic, glad that more travelers were arriving and renting cars. (Hotel occupancy was up 4 percent and hotel room taxes jumped 12 percent in July.)

Even collection of the dreaded 10.5 percent sales and use tax rose nearly 2 percent to $213 million in July over the same period a year ago. General tax collections were up 8 percent. Yes, picking the pockets of the puny 40 percent of the labor force that works is quite popular. Any layoffs, however, would shrink it further.

The bar-restaurant owner, whose parents opened the business located steps from the governor’s mansion decades ago, was all action behind the bar. “We have to work,” he said. “We have to work to push the country forward.”

Applause, please.

˜˜Maria Padilla, Editor

This article was published September 1, 2017, in the Orlando Sentinel. See the story here.

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