Private sector to work with gov’t on fiscal solutions
Representatives from 20 of Puerto Rico’s largest private-sector organizations expressed their willingness to work with the government’s task force on proposals to restructure the island’s fiscal issues, the coalition said Sunday in a joint statement.
The group also asked Gov. Alejandro García-Padilla to support the proposals they will be presenting.
During a recent meeting with Chief of Staff Víctor Suárez, representatives from the Puerto Rico Manufacturers Association, the Puerto Rico Products Association, the CPA Society, the Puerto Rico Chamber of Commerce, among others, expressed their support of the government’s strategy to address the island’s problems. The group also presented four proposals that could have “immediate effects” on the economy:
- Representation of the private sector in the Puerto Rico Fiscal Control Board to be created by the government’s task force;
- Enacting a labor reform;
- Reviewing the regulatory and permitting processes for doing business in the island and;
- Creating an Economic Development Board valid for 10 years.
The Fiscal Control Board and the development of a fiscal adjustment plan are key for Puerto Rico’s recovery, the private-sector executives said.
“We decided to support the process that the government has directed. However, this process must be transparent, and follow our recommendations in an integrated manner,” said Ramón Pérez-Blanco, president of the Puerto Rico Products Association, better known as Made in Puerto Rico.
The private sector’s active participation in the initiatives taken to address the recommendations included in a fiscal report released earlier this month prepared by former International Monetary Fund Economist Anne Krueger, “is fundamentally important to imprint credibility into all of the processes,” said Chamber of Commerce President José Vázquez-Barquet.
Under the same assumption, PRMA President Carlos Rivera-Vélez said, “our business and professional community is united. We’re boosting and keeping the island’s economy afloat. We agree with the private sector’s unity and that the problem is everyone’s, not just the government’s.”
“We also recognize that this is the result of decades of working in disunion, without a strategy, operating in a deficit, and under some federal regulations that don’t take into account Puerto Rico’s reality,” he said.
In a letter the group sent García-Padilla, they stress that for the Fiscal Control Board and the fiscal adjustment plan to have an impact, they must carry two basic elements: credibility and continuity. Consequently, the Board should include two representatives of the private sector and to reinforce the continuity and the plan that is adopted, it should be valid for 10 years.
“The Fiscal Control Board should expeditiously address the tax burdens on the business sector as well as the individual. In the last two to three years more than $3 billion in various types of taxes have been enacted that have undermined our profitability and our investment capacity,” said Kermit Lucena, head of the CPAs.
Therefore, the fiscal adjustment plan should have the goal of gradually reducing the tax burden, he said.
“A projected tax revenue increase into the government’s coffers should come from economic growth and collections, not through an increase in rates and the imposition of new taxes. Reducing the burden frees up capital for companies to invest in growing the economy,” Lucena added.
Other groups that have joined the coalition include: the Puerto Rico Farm Bureau; the Puerto Rico Bankers Association; the Puerto Rico Retail Trade Association; the Puerto Rico Association of Insurance Companies; the Homebuilders Association; the Associated General Contractors of America — Puerto Rico Chapter; and, the Puerto Rico Hospitals Association, among others.
This week, the private sector will convene a roundtable with the media to elaborate on what was achieved at the meeting, and the next steps to be taken.