Posted on 05/08/2006 7:01:34 PM PDT by patton
Puerto Rican government shutdown drags on
BY FRANCES ROBLES frobles@MiamiHerald.com
SAN JUAN - Nearly 100,000 people were forced out of work Monday when the Puerto Rico government ran out of cash to pay them, and lawmakers refused to approve a loan that would fund their paychecks.
''How much patience does Puerto Rico have?'' asked Isidro Negrón, mayor of the southwestern city of San Germán.
Puerto Rico's capitol building took on the air of a street fair as about 100 out-of-work public employees descended on the building to demand an end to the island's fiscal crisis.
Flags waving and music blaring, teachers and other civil servants urged legislators to authorize a line of credit, and sales tax to repay it, that will cover a $700 million budget shortfall.
''The president of the Senate, the House, and the governor, the secretary of the treasury and the head of the Development Bank need to have a meeting,'' said state employees union activist Federico Torres Montalvo. ``And they shouldn't come out until they have come up with an accord.''
Despite nearly round-the-clock sessions in the Puerto Rican legislature, the island woke up to a dismal picture Monday: * 95,762 of 213,000 public employees are out of work
* Classes are canceled at 1,500 public schools, while the Department of Education arranges unemployment payments for 75,758 employees now out of a job.
The Senate was meeting Monday afternoon and the House was scheduled to meet in the evening to vote on a variety of proposals that some hope will end the crisis.
But the governor said none of the various measures go far enough.
''The solution is on the table,'' said Gov. Aníbal Acevedo Vilá. ``A loan with a form of repayment.''
He has urged the House to pass the measure approved last week by the Senate, which would offer a $531 line of credit, to be paid with part of a 7 percent sales tax. The House is strongly against a new sales tax, so it keeps coming up with other ideas that are then shot down by the Senate.
Early Monday the House of Representatives voted to authorize the Government Development Bank to transfer $532 million to the central government. But the legislators did not call it a loan or identify a source of repayment, which troubles the head of the Government Development Bank.
''We are being creative before this situation,'' said House budget committee chairman Angel Pérez. ``What alternatives has the governor come up with? None.''
''That last measure -- stealing $532 million from the Development Bank, is to take the bank on the road to bankruptcy, on fast track,'' Acevedo retorted.
Monday's legislative sessions were expected to continue into the night.
''Besides the profound human pain this crisis is causing, the chain effect could spread through the rest of the economy,'' House leader José Aponte wrote in one proposal for ending the crisis. ``This could hurt hundreds of thousands of additional families throughout Puerto Rico.''
The governor signed an order last week saying that absent a deal, he would close 43 of 118 government agencies. Police, fire, hospital and jails would operate normally, using the funds from the shuttered agencies.
Some agencies such as driver's license bureaus would operate with reduced shifts.
The unprecedented crisis is considered the result of Puerto Rico's deeply divided party politics.
Acevedo's Popular Democratic Party, which supports Puerto Rico's current commonwealth status, is at odds with the opposition New Progressive Party -- which supports statehood and controls the House.
The leader of the New Progressive Party, former governor Pedro Roselló, ran against Acevedo for governor. He is now a member of the Senate.
Acevedo is furiously lobbying to find eight New Progressive Party members to accept his plan.
Life is sucking in PR..my hubbys relatives are not happy!!
Acually, the gas is worth considerably more than the money. LOL.
interesting - any specifics?
You mean the money CAN run out? No bailout from Uncle Sugar?!?!?!?
Californians and New Yorkers take note. You're next.
CA is a real possibility...
Out of control government spending? Lavish gov salaries? Corruption? High taxes? Inflation? Bad economic models?
What has contributed to this sorry state of affairs??
Curious minds want to know..
!!!!!WTH???!!!!
California has 33 Million people and has 208,000 employees.
PR has 3 million (the size of Los Angeles) and has more public employees than California????
ummmm....I think that is why they are broke....
Well we can start with the demand that the Navy remove itself from the territory.
As a commonwealth they are well supported by the U.S. and don't have to pay taxes. That's why they keep refusing Statehood.
I spent time there and loved Puerto Rico and the people.
Well, you're behind the times..
The last Naval base in PR closed, 31 Mar, 2004.. 2 years ago
The economy has been suffering since then, due to lack of money from those bases estimated at $250 Million to $300 Million annually..
Does that mean the price of Rum is going to go down?
(scratches head. Huh? How is PR going to pay it?)
Well, then they won't be able to afford Bacardi Gold. The market softens and Pissant makes out like a bandito! ;o)
Geez. I see how unionizing has been so beneficial to the Puerto Ricans. Sounds like France. Let them rot.
Some of his relatives work for the govt..no pay. One aunt is a teacher and her school closed 2 mos ago. They know the govt is corrupt and only a few powerful families run the island.
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