Puerto Rico legislature’s Budget Office probes general fund revenue, expenditure trends
Fiscal data from the period when the government of Puerto Rico ceased paying the public debt was analyzed as part of a discussion on general fund revenue and spending trends organized by the Legislative Assembly’s Budget Office (OPAL, in Spanish).
At the meeting, financial figures from 2000 to 2021 were examined, focusing on the 2016 fiscal year, when according to official reports the government had $9 billion in revenue and $8.58 billion in expenses.
It was explained that despite a net surplus of $564 million, combined with other financing sources, the amount was not enough to cover the government debt service, which was of around $1 billion.
It was also established that fiscal 2015, the last year in which a payment was made, ended with a net deficit of $621 million. That year, income totaled $8.8 billion and expenditures were at $9.5 billion, including a debt payment of $861 million, Luis F. Cruz-Batista, executive director of OPAL, noted at the meeting.
The discussion was based on government income and expenses as broken down in the Schedule of Revenues and Expenditures Budget and Actual-Budgetary Basis of the General Fund, which is part of the Puerto Rico government’s audited financial statements. Reports presented at the meeting showed that each fiscal year from 2000 to 2014 concluded with a deficit.
This resulted in an accumulated deficit of $25.7 billion over the 15-year span, given that income for the period totaled $118.7 billion and expenses, including debt payment, totaled $144.5 billion.
Cruz-Batista explained that the shortfall was bridged with $9.5 billion from loans and refinancing, $8.9 billion in loans from the Puerto Rico Sales Tax Financing Corp. (Cofina, in Spanish) and $5.7 billion in transfers from other funds, resulting in a net deficit of $1.6 billion.
In the analyzed period, income taxes accounted for 65% of the general fund’s revenue, while the sales and use tax (IVU, in Spanish), implemented in 2006, contributed 4%, and tax collections comprised 23% of the total income.
Of the $144.5 billion the government incurred in the first 15 years of the 21st century, 31% of the expenditures were in education, 20% in public security and 15% in health care.
The OPAL meeting is the first of a series aimed at evaluating the government of Puerto Rico’s financial reports.
