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Espacios Abiertos sues P.R. gov’t for information on tax incentives

Nonprofit organization Espacios Abiertos asked the San Juan Superior Court to enforce Puerto Rico’s constitutional right to access to information and require the government to disclose tax abatements and other tax expenditures and benefits that affect public coffers.

The nonprofit filed a “writ of mandamus: that names Gov. Ricardo Rosselló and Treasury Secretary Teresita Fuentes after asking unsuccessfully since April 13, 2018 former Treasury Secretary Raúl Maldonado and current government officials to publish a fiscal expense report.

“We presented that petition to ensure that the people have access to public information about concessions and tax incentives that constitute expenditures for the government of Puerto Rico,” said Cecille Blondet, executive director of the nonprofit organization that since 2014 has been dedicated to promoting greater transparency of public expenditures to guarantee more effective citizen participation in matters that concern them.

According to Section 208 (b) of the Puerto Rico Oversight, Management, and Economic Stability Act, within six months after the constitution of the Financial Oversight and Management Board for Puerto Rico, the Commonwealth’s government was required to submit to the U.S. appointed body a “Report on Tax Abatements Reduction Agreements” and other similar tax concession deals.

In August, Espacios Abiertos asked the Oversight Board to confirm the existence of the report. A letter the regulatory body sent the nonprofit on Aug. 27, 2018, it confirmed the existence of the report and that they had received it.

Although Section 208 (b) of the PROMESA Act prohibits Board members and staff from making the report public, it does not prevent the government of Puerto Rico from making the public disclosure required by the Constitution and local laws, since it is a document generated in a public agency, Espacios Abiertos claimed.

The federal government has been publishing an official record of fiscal expenditures since the 1970s. This is also the case of 49 of the 50 states, the District of Columbia, and most of the countries that are part of the Organization for Economic Cooperation and Development, the nonprofit argued.

In addition, since 2016, the Governmental Accounting Standards Board in the GASB 77 has required it from all governments and public agencies.

“People have the right to know about every dollar that is invested in tax privileges, which is in turn a dollar that does not enter the general fund. What some people do not pay has a cost for all of us in the reduction of services such as security, health, and education,” said Blondet, referring to funding cuts from the University of Puerto Rico, among others.

“We’re not against tax incentives. What we want is for them to be transparent, so their benefit and cost efficiency can be evaluated without it being done behind people’s backs,” she added.

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