This panel of experts comes as part of efforts to combat proposals to cut $230 billion in food assistance through the budget reconciliation process that could jeopardize access to food for millions of people in the U.S. Among several proposed cuts to the SNAP program is a proposal to reverse a major revision to the Thrifty Food Plan made in 2021 and/or permanently freeze its cost outside of annual inflation adjustments. This disproportionately hurts Puerto Rico, where 42% of residents rely on the Nutrition Assistance Program (NAP), which is already underfunded.

Puerto Rico contributes billions of dollars in federal taxes ($5.14 billion by 2023), but receives unequal treatment and benefits far less than other U.S. jurisdictions.

Puerto Rico is not the only jurisdiction where the federal government spends more than it collects in taxes. There are 28 states and territories that have a per capita deficit with the federal government, and 9 of them have a higher per capita deficit than Puerto Rico.

States and territories with a per capita deficit with the federal government

When analyzing data on federal programs to combat food insecurity (NAP vs. SNAP), we observed a marked disparity in the average monthly outlay per household between Puerto Rico and other U.S. jurisdictions. While the average monthly cost per household under SNAP in the jurisdictions analyzed stands at $374, Puerto Rico, which operates under the block grant-funded Nutrition Assistance Program (NAP), receives only $331 per household. This gap widens further when looking at non-contiguous U.S. jurisdictions such as Guam ($813), Hawaii ($704), Alaska ($667), and the Virgin Islands ($543), which, despite facing similar logistical and economic challenges as Puerto Rico, receive significantly higher benefits.  

The block grant funding structure imposes a rigid cap on the funds allocated to Puerto Rico, which limits its ability to respond to the food needs of its population, especially in times of economic crisis or natural disasters. This situation reflects a systemic inequity in the distribution of federal resources, where Puerto Rico, despite being a U.S. territory with high rates of poverty (41.6%) and food dependency, lags behind other jurisdictions that receive more equitable treatment under the SNAP model.

Nutritional Assistance (NAP and SNAP)

Puerto Rico is the poorest jurisdiction in the United States. While its residents contribute a significant amount of federal taxes ($5.14 billion by 2023), they do not receive the same federal benefits as their counterparts. If you want to learn more about the issue, access ObservatorioFiscalPR.com for an analysis of the main federal programs whose allocations demonstrate the unequal tax treatment of Puerto Rico.

Access our brochure at the following link: Federal Taxes (Download PDF Version)

Entre los expertos también invitados se encontraban Javier Balmaceda (Center on Budget and Policy Priorities), Lillian Rodriguez Lopez (Coalition for Food Security for Puerto Rico) y Estela Reyes Rodríguez (Instituto del Desarrollo de la Juventud). El panel fue moderado por Maritere Padilla Rodríguez (Hispanic Federation).

Puerto Rico contribuye con miles de millones de dólares en impuestos federales ($5.14 mil millones para 2023), pero recibe un trato desigual y obtiene muchos menos beneficios que el resto de jurisdicciones de los Estados Unidos. 

Puerto Rico no es la única jurisdicción donde el gobierno federal gasta más de lo que recauda en impuestos. Hay 28 estados y territorios que presentan un déficit per cápita con el gobierno federal, y 9 de ellos tienen un déficit per cápita mayor que el de Puerto Rico.

Estados y territorios con una contribución neta per capita negativa con el gobierno federal

Al analizar los datos de los programas federales para combatir la inseguridad alimentaria (PAN vs. SNAP) observamos una marcada disparidad en el desembolso mensual promedio por hogar entre Puerto Rico y otras jurisdicciones de Estados Unidos. Mientras el costo mensual promedio por hogar bajo SNAP en las jurisdicciones analizadas se sitúa en $374, Puerto Rico, que opera bajo el Programa de Asistencia Nutricional (PAN) financiado mediante block grant, recibe apenas $331 por hogar. Esta brecha se amplía aún más al observar jurisdicciones no contiguas a Estados Unidos continental como Guam ($813), Hawái ($704), Alaska ($667) e Islas Vírgenes ($543), las cuales, a pesar de enfrentar desafíos logísticos y económicos similares a los de Puerto Rico, reciben beneficios significativamente mayores.  

La estructura de financiamiento mediante block grant impone un tope rígido a los fondos asignados a Puerto Rico, lo que limita su capacidad para responder a las necesidades alimentarias de su población, especialmente en tiempos de crisis económica o desastres naturales. Esta situación refleja una inequidad sistémica en la distribución de recursos federales, donde Puerto Rico, a pesar de ser un territorio estadounidense con altas tasas de pobreza (41.6%) y dependencia alimentaria, queda rezagado frente a otras jurisdicciones que reciben un trato más equitativo bajo el modelo de SNAP.

Asistencia nutricional (PAN y SNAP)

Puerto Rico es la jurisdicción más pobre de los Estados Unidos. Mientras sus residentes contribuyen con una cantidad significativa de impuestos federales ($5.14 mil millones para 2023), no reciben los mismos beneficios federales que sus contrapartes. Si desea conocer más sobre el tema, acceda al ObservatorioFiscalPR.com para el análisis de los principales programas federales cuyas asignaciones demuestran la desigualdad en el trato fiscal hacia Puerto Rico.

Accede a nuestro tríptico en el siguiente enlace: Federal Taxes (Download PDF Version)

Given the evident delay in a new restructuring plan for the Puerto Rico Electric Power Authority, which led to a recent order from Judge Taylor Swain requiring the Fiscal Oversight and Management Board to issue a report on the delayed fiscal plan and a timeline for presenting the amended adjustment plan for PREPA before February 28, 2025, Espacios Abiertos (EA) has undertaken the task of updating its report Your Advisors, Your Money: Lack of Access to the Data That Has Informed the restructuring in Puerto Rico to make transparent the expenditures that the people of Puerto Rico continue to pay for the restructuring of the public debt and other associated costs.

In the previous report, EA quantified the total expenditure on consultants and legal representation for restructuring at just over $1.5 billion, based on reports from the Board’s annual and monthly statements, publications from the federal court, and expenses reported by the Fee Examiner. Currently, this total cost has increased to $2,021,957,705. This increase is observed across all spending categories: from $297,774,055 to $308,111,005 for consultants and legal representation hired outside the Title III process; from $9,780,502.15 to $11,329,555.08 for the Fee Examiner; and from $1,006,718,638 to $1,702,517,144 for consultants hired within the Title III processes in the federal court. This represents an increase of 34.77% from June 18, 2024. Finally, it is worth remembering that in 2016, the Congressional Budget Office estimated that Puerto Rico would not exceed $370 million in legal and financial advisory costs over 10 years.

Distribution of Consulting Expenses Between 2017 and 2024

Evolution of Consulting Expenses in Puerto Rico’s Debt Restructuring Process (2017-2024)

Data obtained from the federal court provides insight into the total expenditures disbursed for litigation related to PROMESA. Among the top five lawsuits, payments to consultants, financial advisors, mediators, and attorneys are identified and distributed as follows: the Government of Puerto Rico’s lawsuit tops the list with $1,109,013,249, followed by the Puerto Rico Electric Power Authority with $438,803,487, COFINA with $62,816,103, the Highways and Transportation Authority with $51,165,166, the Retirement System with $39,758,739, and $960,400 in the case of the Public Buildings Authority. Additionally, $308,111,005 has been disbursed to consultants hired outside the Title III process. These consultants, hired outside the Title III process, are directly contracted by the Fiscal Oversight Board and are paid directly from the Board’s annual budget.
Government Central consulting expenses increased from $870,449,697 to $1,109,013,249, reflecting a 27.41% increase. The Puerto Rico Electric Power Authority (PREPA) saw the highest relative increase, rising from $181,100,752 to $438,803,487, a 142.30% increase. The Highways and Transportation Authority also experienced a rise, going from $41,004,842 to $51,165,166, a 24.78% increase. The Retirement System increased from $36,658,795 to $39,758,739, growing by 8.46%. Meanwhile, COFINA and the Public Buildings Authority have shown minimal variations since those lawsuits concluded.

Distribution of Expenditures in Major Lawsuits Under PROMESA

We also observe changes in the primary consultants during this process. Proskauer Rose LLP tops the list with $355,826,874, McKinsey & Company with $307,318,840, and Ankura Consulting Group, LLC with $180,947,374. Other notable firms include Ernst & Young LLP ($179,445,657), CITI Group Global Markets Inc. ($126,565,344), O’Melveny & Myers ($115,828,094), PJT Partners LP ($115,000,000), Paul Hastings LLP ($86,841,542), Deloitte ($55,497,713), and Alvarez & Marsal North America, LLC ($35,727,382). Compared to the previous report, the firms that reported the largest increase in payments in the most recent period are Ankura Consulting Group, LLC, with an increase of $137.59 million, representing a 317.38% increase in 14 months, followed by Proskauer Rose LLP, which received an additional $131.32 million, reflecting a 58.50% growth in the same period. Other notable increases include CITI Group Global Markets Inc., which rose by $46.50 million (58.08%), Ernst & Young LLP, with $45.62 million (34.09%), and PJT Partners LP, which doubled its payments with an increase of $57.50 million, representing a 100% increase in 14 months.

Top Consultants and Attorneys Paid in Puerto Rico’s Debt Restructuring Process

Ante el retraso evidente de un nuevo plan de reestructuración sobre la Autoridad de Energía Eléctrica de Puerto Rico que propició una reciente orden de la jueza Taylor Swain para que la Junta de Control Fiscal emita un informe sobre el retrasado plan fiscal y un calendario sobre la presentación del plan de ajuste enmendado de la AEE antes del 28 de febrero de 2025, Espacios Abiertos (EA) se ha dado la tarea de actualizar su informe Sus asesores, tus chavos: falta de acceso a los datos que han informado la reestructuración en Puerto Rico (2023) con el objetivo de transparentar el gasto que sigue pagando el pueblo de Puerto Rico en la reestructuración de la deuda pública y otros gastos asociados. En el pasado informe, EA cuantificó el gasto total de los consultores y representación legal de la reestructuración en poco más de $1,500 millones de dólares entre lo reportado en los informes anuales y mensuales de la Junta, lo publicado por el tribunal federal y los gastos reportados por el Oficial Examinador. Actualmente este costo total aumentó a $2,021,957,705. Este aumento se observa en todos los renglones de gasto, de $297,774,055 a $308,111,005 para aquellos consultores y representación legal contratados fuera del proceso de Título III; de $9,780,502.15 a $11,329,555.08 para el Oficial Examinador; y de $1,006,718,638 a $1,702,517,144 para aquellos consultores contratados dentro de los procesos de Título III en el tribunal federal. Esto representa un aumento de 34.77% desde el 18 de junio de 2023 hasta ahora. Por último, vale la pena recordar que el Congressional Budget Office estimó en 2016 que Puerto Rico no superaría los $370 millones en asesoría legal y financiera en 10 años.

Distribución de gastos en consultoría entre 2017 y 2024

Evolución del gasto en consultores en el proceso de reestructuración de la deuda de Puerto Rico (2017-2024)

Los datos obtenidos de los expedientes de la corte federal permiten visibilizar el gasto total desembolsado por litigios relacionados con PROMESA. Entre los cinco principales pleitos, se identifican pagos a consultores, asesores financieros, mediadores y abogados, distribuidos de la siguiente manera: el pleito del Gobierno de Puerto Rico encabeza la lista con $1,109,013,249, seguido por el de la Autoridad de Energía Eléctrica con $438,803,487, COFINA con $62,816,103, la Autoridad de Carreteras con $51,165,166, el Sistema de Retiro con $39,758,739 y $960,400 en el caso de Edificios Públicos. Además, se han desembolsado $308,111,005 a consultores contratados fuera del proceso de Título III. Estos consultores contratados fuera del proceso de Título III son contratados directamente por la Junta de Supervisión Fiscal y son pagados directamente del presupuesto anual de la Junta. Los gastos en consultores del Gobierno Central pasó de $870,449,697 a $1,109,013,249, reflejando un incremento del 27.41%. La Autoridad de Energía Eléctrica (AEE) tuvo el mayor aumento relativo, pasando de $181,100,752 a $438,803,487, lo que representa un incremento del 142.30%. La Autoridad de Carreteras también vio un aumento, pasando de $41,004,842 a $51,165,166, un 24.78% más. El Sistema de Retiro pasó de $36,658,795 a $39,758,739, aumentando en 8.46%. Mientras que COFINA y Edificios Públicos presentan variaciones mínimas ya que los pleitos han culminado.

Distribución del gasto en litigios principales bajo PROMESA

Observamos además cambios en los principales consultores durante este proceso. Proskauer Rose LLP encabeza la lista con $355,826,874, seguido por McKinsey & Company con $307,318,840 y Ankura Consulting Group, LLC con $180,947,374. Otras firmas destacadas incluyen Ernst & Young LLP ($179,445,657), CITI Group Global Markets Inc. ($126,565,344), O’Melveny & Myers ($115,828,094), PJT Partners LP ($115,000,000), Paul Hastings LLP ($86,841,542), Deloitte ($55,497,713) y Alvarez & Marsal North America, LLC ($35,727,382). Comparado con el informe anterior las firmas que han reportado el mayor aumento en pagos en el período más reciente son Ankura Consulting Group, LLC, con un incremento de $137.59 millones, lo que representa un 317.38% de aumento en 14 meses, seguida por Proskauer Rose LLP, que recibió $131.32 millones adicionales, reflejando un 58.50% de crecimiento en el mismo periodo. También destacan CITI Group Global Markets Inc., con un aumento de $46.50 millones (58.08%), Ernst & Young LLP, con $45.62 millones(34.09%), y PJT Partners LP, que duplicó sus pagos con un incremento de $57.50 millones, representando un 100% de aumento en 14 meses.

Principales consultores y abogados pagados en el proceso de reestructuración de la deuda de Puerto Rico

Summary of the 2024-2025 budget as proposed by the Government and commented on by the FOMB. While the Board proposed the same amount of $13,062 million as the Executive’s version, it established a new distribution. The FOMB also reduced by almost $900 million the $13,954 million version approved by the Legislative Assembly that the Board invalidated once again relying on PROMESA. See the graphs below.

Espacios Abiertos’ team, under the direction of Daniel Santamaría-Ots, EA’s Research Director, produced this report and visualization. (You can Access the report in its English version here.)

With the purpose of democratizing access to fiscal information, Espacios Abiertos created the Fiscal Observatory, to foster better knowledge and understanding of the allocation of public funds through the visualization of the government’s budget (central government, municipalities, and debt service).  Currently, the Fiscal Observatory allows you to access the proposed budget for the next fiscal year 2024-2025, as well as access the interactive dashboard with every budget approved, revenues and expenses since 2006.  Over 50,000 fields of official data, easily available. Visit and explore our platform at https://www.observatoriofiscalpr.com

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While our elected bodies and the Financial Oversight and Management Board (FOMB) seem unable to agree on what constitutes the first balanced budget (see FOMB, letter to the Secretary of the Puerto Rico Department of Treasury) that could potentially lead to an exit in four years from the entity created by the U.S. Congress, the Board continues to determine each year both the amount and the composition of the budget for the people of Puerto Rico.

This fiscal year, beginning July 1, is no exception. In a first letter sent on May 16 to the executive branch (see FOMB, Notice of Violation to the proposed Commonwealth of Puerto Rico Budget for Fiscal Year 2024-2025), and pursuant to Section 202(c)(1)(B) of the PROMESA Act, the Board once again informs the people of Puerto Rico that the proposed (see OMB, Proposed Budget by the Governor for the Fiscal Year 2024-2025) General Fund budget does not reflect their public policy priorities. Although the Board proposed the same amount of $13,062 million as the executive version, it determined a new composition. In a second letter (see FOMB, Notice of Non-Compliance to the Legislative Assembly regarding the General Fund Budget for Fiscal Year 2024-2025) sent on June 23 to the Legislative Assembly, and pursuant to Section 202(d)(1) of the PROMESA Act, the Board this time invalidates the $13,954 million budget approved with a broad majority in both the House of Representatives and the Senate of Puerto Rico. Thus, we see once again that the Board not only decides the composition but also the size of the General Fund budget. This scenario worsens as the unilateral decision-making in budgetary matters has removed public budget debates and citizen participation (see EA, Two Budgets and Zero Participation) in public hearings. While letters and certifications are exchanged between the Board and the Puerto Rican government, the democratic deficit corners citizens’ right to decide.

The Board has again determined that this year will approve certain measures, condition some, and deny others. Overall, this has resulted in the denial of $515.8 million and the approval of $401 million for the proposed General Fund budget for the next fiscal year. For example, while it conditions $102 million to the University of Puerto Rico (UPR) for the second consecutive year, it disallows $82 million to municipalities, denies $20 million to implement the social reconstruction and violence prevention plan, or declines $15.3 million to hire 856 special education coordinators, the Board does authorize $14 million to supplement funding for political party contributions.

Do these priorities represent your public policy and budget priorities?

Let’s analyze the Board’s message in response to the executive’s request for incremental funds and budget changes. The letter contains four major sections: 1) approved budget items that comply with the certified fiscal plan in force and with certain requested information requirements; 2) denied budget items that do not comply with the certified fiscal plan but could be reconsidered during the next fiscal year; 3) permanently denied items; and finally, 4) revised budget items with authorized budget increases and decreases. Access the Report here.

The Board approved $130.7 million after the executive’s requests complied with the certified fiscal plan in force and included certain additional information requirements. The most notable items include $30 million from the Department of Natural and Environmental Resources (DNER) for the rental of diesel pumps for flood control ($15 million directly to the agency and another $15 million through allocations under the custody of OMB), $15 million from the Adoption Service of the Department of Family and Children Administration (ADFAN) for the “Homes” family care services initiative, and $14 million to supplement funding for political party contributions ($12 million to match political party donations and $2 million for campaign administrative expenses as per Law 222 of 2011).

The Board rejected $396.9 million that could be reconsidered if they comply with the certified fiscal plan in force and with certain additional information requirements. Among the most important denied items subject to conditions for future approval are: first, and as occurred last year, the conditionality of $102 million to the University of Puerto Rico (UPR) until a strategic plan is presented; second, the denial of $80 million to municipalities to finance their Medicaid contributions for not complying with Law 29 of 2019; and third, the disapproval of $69.6 million for the Financial Management Agenda due to lack of detail on its estimated costs. Fourth, the rejection of $21 million for the decentralization of the Department of Education (IDEAR) due to insufficient information and lack of clarity in the methodology used to justify the investment. Lastly, fifth, the refusal of $20 million to implement the social reconstruction and violence prevention plan for not providing adequate information, including its objective, business plan, and specific use of funds. The denial of these items and the rest shown in the graph could be approved under certain conditions if the Board believes they comply with the certified fiscal plan in force and the pre-established conditions in its letter to the executive.

The Board denied $118.9 million to the government without the possibility of amendment for not complying with the current certified fiscal plan. Among the most relevant permanently denied items are the following initiatives: first, the Board rejected $45.7 million to finance the public service reform initiative. While the government requested $74 million to finance this reform, the Board only granted $25 million. Second, it denied $18.9 million for technology investment (PRITS): the government requested $23 million for various technological initiatives and the Board only granted $4.1 million to renew Microsoft, Oracle, and other security software licenses. Third, it rejected $15.3 million to hire special education coordinators for the Department of Education. The executive requested $20 million to hire 856 special education coordinators and the Board granted $826,000 to launch a pilot program to evaluate the needs of these coordinators and $3.9 million in incentives for the pilot itself. Fourth, it denied $10.5 million to the Office for Socioeconomic and Community Development (ODSEC) to finance two programs that promote well-being and improve the quality of life of the elderly. The government requested $21 million and the Board granted $10.5 million. Fifth, it declined $9.2 million to the State Elections Commission. The government requested $31 million and the Board granted $21.8 million.

Lastly, the Board authorized budget changes worth $270.4 million, modifying 44 budget items by authorizing increases in forty (40) of them and decreases in four (4). Among the largest items is the $110.7 million increase, mostly intended to finance part of the payroll of the Department of Education due to the expiration of federal ESSER (“Elementary and Secondary School Emergency Relief”) funds; second, a $44 million increase for electricity and water payments to certain government agencies; third, a $21.7 million increase to finance the administrative office of the Department of Public Safety; and fourth, a $20.1 million increase to finance salary adjustments and surgical materials for the Medical Services Administration (ASEM).

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To provide accountability for the budgetary processes—both central government and municipalities—and the country’s public debt, Espacios Abiertos created the Fiscal Observatory. Here, you can access the proposed budget for the next fiscal year 2024-2025, already approved by the Legislative Assembly but still pending certification by the Board on or before June 21, 2024. Visit and explore our platform at the Fiscal Observatory of Puerto Rico.

Resumen del presupuesto 2024-2025 según propuesto por el Gobierno y comentado por la Junta, y es que si bien la Junta propuso la misma cantidad de $13,062 millones que la versión del Ejecutivo, ésta estableció una nueva distribución y redujo en casi $900 millones la versión de la Asamblea Legislativa que con amplias mayorías tanto en la Cámara de Representantes como en el Senado aprobó un presupuesto de $13,954 millones que la Junta invalidó amparándose una vez más en la ley PROMESA.

Informe y visualización realizados por el equipo de Espacios Abiertos bajo la dirección de Daniel Santamaría-Ots, Director de Investigación de EA.  (Acceda aquí el informe)

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Mientras nuestros organismos electos y la Junta de Supervisión Fiscal no parecen ponerse de acuerdo en cuál ha sido el primer presupuesto balanceado (ver JSF, Carta al Secretario de Hacienda de Puerto Rico, 6 junio 2024) que pudiera abrir la puerta a una posible salida en cuatro años del organismo creado por el Congreso de los EE. UU., este último define cada año tanto la cantidad como la composición del presupuesto del pueblo de Puerto Rico.

Este año fiscal (AF 2024-2025) que empezará el próximo 1 de julio no es ninguna excepción. En una primera carta (ver JSF, Notificación de incumplimiento al Gobernador sobre el presupuesto del Fondo General para el año fiscal 2024-2025) enviada el pasado 16 de mayo al ejecutivo, y en virtud de la Sección 202(c)(1)(B) de la Ley PROMESA, la Junta le dice una vez más al pueblo de Puerto Rico que ese presupuesto propuesto (ver OGP, Presupuesto propuesto por el Gobernador para el año fiscal 2024-2025) del Fondo General no representa sus prioridades de política pública. Si bien la Junta propuso en esta primera comunicación la misma cantidad de $13,062 millones, al igual que la versión del ejecutivo, esta determinó una nueva composición. En una segunda carta (ver JSF, Notificación de incumplimiento a la Asamblea Legislativa sobre el presupuesto del Fondo General para el año fiscal 2024-2025) enviada el pasado 23 de junio a la Asamblea Legislativa, y en virtud de la Sección 202(d)(1) de la Ley PROMESA, la Junta invalida esta vez el presupuesto de $13,954 millones aprobado con amplia mayoría tanto en la Cámara de Representantes como en el Senado de Puerto Rico. Así constatamos un año fiscal más que la Junta no solo decide la composición sino además el tamaño del presupuesto del Fondo General. Este escenario además se agrava: el unilateralismo decisorio en asuntos presupuestarios ha sacado del mapa el debate público presupuestario y la participación ciudadana (ver EA, Dos presupuestos y cero participación) en vistas públicas. Mientras cartas y certificaciones van y vienen entre la Junta y el gobierno puertorriqueño, el déficit democrático arrincona el derecho a decidir de la ciudadanía.

Así la Junta ha determinado otro año más que este año aprobará ciertas medidas, condicionará algunas y denegará otras. En términos generales, esto ha supuesto la denegación de $515.8 millones y la aprobación de $401 millones (es decir, la Junta de Supervisión Fiscal determinó el uso de al menos el 7% del presupuesto del Fondo General para el año fiscal 2024-25) para el presupuesto del Fondo General propuesto para el próximo año fiscal. Por ejemplo, mientras por segundo año consecutivo condiciona $102 millones a la Universidad de Puerto Rico (UPR), desautoriza $82 millones a los municipios, deniega $20 millones para implementar el plan de reconstrucción social y prevención de la violencia o declina $15.3 millones para contratar 856 coordinadores de educación especial, la Junta sí autoriza $14 millones para complementar la financiación de contribuciones a partidos políticos.

¿Representan estas prioridades tus prioridades de política pública y presupuesto?

En esta pantalla, presentamos un vistazo gráfico del mensaje de la Junta en respuesta a la propuesta del Ejecutivo y que contiene: 1) partidas presupuestarias aprobadas al cumplir con el plan fiscal certificado en vigor y con ciertos requerimientos de información solicitados; 2) partidas presupuestarias denegadas al no cumplir con el plan fiscal certificado que podrían ser reconsideradas durante el próximo año fiscal; 3) partidas denegadas permanentemente; y, por último, 4) partidas presupuestarias revisadas con autorización de aumentos y decrementos presupuestarios.  Acceda el informe aquí.

La Junta aprobó $130.7 millones después de que las peticiones del ejecutivo cumplieran con el plan fiscal certificado en vigor y adjuntaran ciertos requerimientos de información adicional. Entre las partidas más destacadas, figuran los $30 millones del Departamento de Recursos Naturales y Ambientales (DRNA) para el alquiler de bombas diésel para control de inundaciones ($15 millones directos a la agencia y otros $15 millones a través de asignaciones bajo custodia de OGP), $15 millones del servicio de adopción de la Administración de Familias y Niños del Departamento de la Familia (ADFAN) para la iniciativa de servicios de cuidado familiar del programa “Hogares” y $14 millones para complementar la financiación de contribuciones a partidos políticos ($12 millones para parear las donaciones a partidos políticos y $2 millones para los gastos administrativos de la campaña según la Ley 222 de 2011).

La Junta rechazó $396.9 millones que podrían ser reconsiderados si logran cumplir con el plan fiscal certificado en vigor y con ciertos requerimientos de información adicional. Entre las partidas más importantes denegadas y sujetas a condiciones para posterior aprobación tenemos: en primer lugar y al igual que ocurrió el año pasado, la condicionalidad de $102 millones a la Universidad de Puerto Rico (UPR) hasta que no se presente un plan estratégico; segundo, la denegación de $80 millones a los municipios para financiar sus aportaciones a Medicaid por no cumplir con la Ley 29 de 2019; y tercero, la desaprobación de $69.6 millones para la Agenda de Administración Financiera por falta de detalle sobre sus costos estimados. Además, en cuarto lugar, tenemos la desautorización de $21 millones para la descentralización del Departamento de Educación (IDEAR) por falta de información suficiente, además de falta de claridad en la metodología utilizada que justifique la inversión. Por último, en quinto lugar, figura la no autorización de $20 millones para implementar el plan de reconstrucción social y prevención de la violencia por no aportar información adecuada que incluya su objetivo, un plan de negocio y el uso específico de los fondos. La denegación de estas partidas y el resto mostradas en la gráfica podrían ser aprobadas bajo determinados supuestos si la Junta entiende que cumplen con el plan fiscal certificado en vigor y con las condiciones preestablecidas en su carta al ejecutivo.

La Junta denegó al gobierno $118.9 millones sin posibilidad de enmienda por no cumplir con el actual plan fiscal certificado. Entre las partidas más relevantes de denegación permanente se encuentran las siguientes iniciativas: primero, la Junta rechazó $45.7 millones para financiar la iniciativa de la reforma del servicio público. Mientras el gobierno solicitó $74 millones para financiar dicha reforma, la Junta solo concedió $25 millones. Segundo, negó $18.9 millones para inversión en tecnología (PRITS): el gobierno solicitó $23 millones para distintas iniciativas tecnológicas y la Junta solo concedió $4.1 millones para renovar las licencias de Microsoft, Oracle y otras licencias de software de seguridad. Tercero, rechazó $15.3 millones para contratar coordinadores de educación especial para el Departamento de Educación. El ejecutivo solicitó $20 millones para contratar 856 coordinadores de educación especial y la Junta concedió $826 mil para lanzar un programa piloto para evaluar las necesidades de dichos coordinadores y $3.9 millones en incentivos para el propio piloto. Cuarto, denegó $10.5 millones para la Oficina para el Desarrollo Socioeconómico y Comunitario (ODSEC) para financiar dos programas que promueven el bienestar y mejorar la calidad de vida de adultos mayores. El gobierno solicitó $21 millones y la Junta concedió $10.5 millones. Quinto, declinó $9.2 millones a la Comisión Estatal de Elecciones. El gobierno solicitó $31 millones y la Junta concedió $21.8 millones.

Por último, la Junta autorizó cambios en el presupuesto por valor de $270.4 millones modificando 44 partidas presupuestarias en las que autorizó incrementos en cuarenta (40) de ellas y disminuciones en otras cuatro (4). Entre las partidas más grandes figura el incremento de $110.7 millones que en su mayoría van destinados a financiar parte la nómina del Departamento de Educación debido a la expiración de los fondos federales ESSER (“Elementary and Secondary School Emergency Relief”); en segundo lugar, figura el aumento de $44 millones para pago de luz y agua a ciertas agencias de gobierno; tercero, el incremento de $21.7 millones para financiar la oficina administrativa del Departamento de Seguridad Pública; y cuarto, el aumento de $20.1 millones para financiar ajustes salariales y materiales quirúrgicos de la Administración de Servicios Médicos (ASEM).

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Con el propósito de rendir cuentas de los procesos presupuestarios, tanto del gobierno central como de los municipios, y de la deuda pública del país, Espacios Abiertos creó el Observatorio Fiscal. En él podrás acceder al presupuesto propuesto para el próximo año fiscal 2024-2025, así como los presupuestos aprobados desde 2006.  Visita y explora nuestra plataforma en https://www.observatoriofiscalpr.com

As residents of the island we do not pay federal income taxes, but we do pay the same federal medicare, social security, self-employment, unemployment, customs, and merchandise taxes as residents of the states.  In 2022 the federal taxes paid by the residents of Puerto Rico to the US added up to $4.8 billion dollars.  Nonetheless, residents of Puerto Rico do not get the same federal benefits.  For example: Medicare and Medicaid have a spending cap, we are excluded from the SSI and federal EITC, and annually receive $1.6 billion less for nutritional assistance (through NAP instead of SNAP).

Puerto Rico does receive more federal expenditures than it pays in federal taxes, but so do half of the states!!!!  Which include: Michigan, Idaho, Louisiana, Oklahoma, Oregon, Montana, Hawaii, Vermont, Maryland, Pennsylvania, Maine, Wisconsin, Alabama, Arizona, Mississippi, West Virginia, Virginia, New Mexico.

Moreover, seven states have a greater deficit in net federal expenditures per capita than Puerto Rico, these are: Connecticut, Indiana, South Carolina, Alaska, Minnesota, Kentucky and North Dakota.

Download here the one pager fact sheet.

See graphs below which reference data from IRS, USAspending.gov and Espacios Abiertos analysis:

While the municipalities’ audited statements reflect a total of $539 million in unearned revenue from tax expenditures

San Juan, March 19, 2024 – The fourth and most recent Tax Expenditure Report published by the Treasury in Puerto Rico establishes that preferential rates and corporate exemptions constitute $22 billion of the $24 billion in tax expenditures reported in Puerto Rico and the trend continues to increase.

Against this backdrop, and considering the great weight of preferential treatment and tax exemptions for foreign corporations as an incentive to do business in Puerto Rico, Espacios Abiertos (EA) warns of the effect the Global Minimum Tax (GMT) that is being discussed around the world could have on the island’s economy.

On the other hand, Espacios Abiertos’ analysis presents, for the first time, a look at fiscal expenditures at the municipal level.

The non-profit, independent and non-partisan organization analyzed the official report titled Puerto Rico Tax Expenditures 2024 (PRTER) using the standards for audited statements of the Governmental Accounting Standards Board (GASB), which sets accounting and financial reporting standards for state and local administrations in the United States. It also analyzed the audited financial statements of the municipalities, in compliance with GASB 77, a standard that came into force December 31, 2015.

EA’s analysis highlights the need for greater transparency, detail, and granularity in the information about the impact of tax benefits, so that the report, says the report published by economist Daniel Santamaría Ots, director of research at EA.

“Our analysts found that the most recent tax expenditure report of the government of Puerto Rico lacks updated data, necessary for a thorough evaluation and cost-benefit analysis of each of the credits, exemptions and incentives granted,” said Wilmarí de Jesús, Open Space Analyst.  “Accurate information is essential for policymakers, government officials, and citizens to make informed and timely decisions. This ensures that the effects of tax exemption laws are properly assessed and that public resources are managed effectively and efficiently,” de Jesus said.

“Since 2022, Espacios Abiertos has insisted on the need to present PRTERs in an open data format that allows the analysis of these measures with complete, reliable and easy-to-process data,” said Santamaría Ots.

The federal budget law of 1974 defines tax expenditures as the loss of government revenue as a result of laws that reduce or even eliminate the normal tax liability of a group of taxpayers or some defined economic activity. This preferential treatment can take several forms, such as exclusions, exemptions, or special deductions that reduce taxable income; or there may be credits, decrees, deferrals, and special tax rates provided. By causing the reduction of government revenues, they are designated as “expenses” based on the premise that a dollar not entering the treasury is economically equivalent to a dollar of public spending, which is why the term “tax expenditures” is used.

 EA’s Findings on the PRTER 2024 Report

• 52% ($22,222.80 million) of the unearned income from tax expenses in 2021 corresponds to corporate contributions.
• In 2021, a total fiscal expenditure of $24,538.60 million was projected, with 67.28% ($16,510.50 million) going to economic development.
• In 2021, the government bet on indirect or tax expenditures over direct expenditures in areas such as economic development, retirement, and housing.
• In the 2024 PRTER, 61.46% of tax expenditures are estimated, showing an improvement over the 53.7% of the 2023 PRTER. However, Puerto Rico is still below the world median in terms of the share of tax expenditures for which estimates are provided.

EA’s Key Findings on Municipal Tax Expenditures

1. The lack of centralized visibility on tax expenditures at the municipal level compared to state-level reporting is highlighted. Currently, 54 of the 78 municipalities (69.23%) contain complete or partial estimates of tax expenditures.
2. At least $539,163,263 million in additional tax expenses to the $24,538 million identified in the PRTER 2024 are no longer accrued.
3. Of the $539.1 million of unearned income, at least $226.3 million (41.98%) is in personal property taxes, followed by $172.4 million (31.9%) in real property taxes.
4. State laws play a dominant role in enabling 86.84% of total tax expenditures, equivalent to $468,228,427 million.
5. The municipality of Carolina leads with $146,266,526 in unearned revenue, followed by Guayama with $59,580,476 and Vega Baja with $36,601,553.
6. In six cases (Guayama, Juana Díaz, Vega Baja, Carolina, Gurabo and Cidra) tax expenditures exceeded their municipal budget. In 11 cases, tax expenditures exceed 50% of the municipal budget.

EA Recommendations

• Legislate to ensure detailed annual reports on state and municipal tax expenditures that comply with standards and best practices, including specific information on tax exemptions granted, laws supporting them, and unearned income figures.
• Include detailed reports on tax expenditures in the government budget approval process so that legislators and government officials have solid information to make decisions on resource allocation and the continuation of tax breaks. In this way, transparency and effective fiscal management are promoted.
  • In 2023, the tax expenditure report was published on June 30, 2023, one day after the approval of the 2023-2024 budget by the Legislative Assembly, and six months after the deadline set by the Financial Oversight and Management Board for Puerto Rico for the Government’s Certified Fiscal Plan.
• Use up-to-date data in the estimation of fiscal expenditures for greater accuracy and actual effectiveness of the projections.
• Include municipal tax expenditures in all audited municipal statements, in accordance with the provisions of GASB 77.

“By ensuring that all the necessary data is available in the appropriate forms, we will be able to have detailed information on tax expenditures, which will result in better evaluations of the effectiveness of fiscal policies and that the necessary adjustments can be made,” conclude de Jesús.

In 2017, Espacios Abiertos began to insist on the need to know, disseminate and analyze fiscal expenditures in Puerto Rico. Between 2018 and 2019, it took a case to the Supreme Court seeking disclosure of these expenses. In September of 2019, for the first time, the government of Puerto Rico published a report on tax expenditures, something that the federal government, the states, and many countries had done since the 1970s. To date, four fiscal expenditure reports have been published in Puerto Rico, titled Puerto Rico Tax Expenditure Reports (PRTER).