The Financial Oversight and Management Board for Puerto Rico announced it authorized a $185 million short-term liquidity facility to help Puerto Rico’s 78 municipalities offset the timing of expected receipt of property tax revenue due to the COVID-19 pandemic.
The facility would be made by the Commonwealth of Puerto Rico to the Municipal Revenue Collection Center (CRIM, in Spanish), which pays monthly remittances to the municipalities based on property tax collection revenues.
The facility would be available through July 31, 2020 and, based on estimated property tax collections, is expected to be fully repaid by Nov. 30, 2020.
CRIM extended the tax filing due date of personal property tax returns to provide taxpayers cash flow relief because of the pandemic. The liquidity facility will make it possible for CRIM to advance monthly remittances to the municipalities for the months of May, June and July viable.
With this facility, the Oversight Board and the government of Puerto Rico ensure that municipalities can continue to provide their important services to the people of Puerto Rico despite the COVID-19 emergency.
“The Oversight Board understands that tax collections since the month of March have declined significantly as a result of measures taken during the pandemic,” said the Oversight Board’s Executive Director Natalie Jaresko.
“We all know how important municipalities are in Puerto Rico and the Oversight Board remains committed to help find fiscally responsible ways to overcome the challenges municipalities are facing today,” she said.
The Oversight Board provided the authorization, draft liquidity facility agreement and draft legislative text to Gov. Wanda Vázquez and the Fiscal Agency and Financial Advisory Authority.
The resolution authorizing the use of Commonwealth funds requires the approval of the Puerto Rico Legislature, and the Oversight Board hopes the facility will be approved as soon as possible and in time for the May 15 payroll, Jaresko said.