Puerto Rico Treasury reports $9.3B in Fiscal ’20 revenue; OBoard says it’s incomplete
The Puerto Rico Treasury Department reported that the preliminary revenue for the General Fund during the 2019-2020 fiscal year totaled $9.3 billion.
Although the collections of the last two quarters of this fiscal year were affected by the earthquakes and the COVID-19 pandemic, they exceeded the revised Financial Oversight and Management Board for Puerto Rico projection by $276.4 million, or 3.1%.
However, in a statement, the Oversight Board said the revenue was not calculated according to modified accrual accounting standards, as required by the Puerto Rico Oversight, Management and Economic Stability Act, because it excludes tax payments for fiscal year 2020 that had not been accounted for by June 30.
“The Certified Fiscal Plan projects General Fund revenue to come in at $9.6 billion [net of Earned Income Tax Credit expenses], including about $600 million of tax revenues that the Oversight Board projected are deferred because the government will collect income taxes later than usual due to the COVID-19 pandemic. Such deferred tax revenue will be booked in fiscal year 2020 even if the government collects the taxes in fiscal year 2021,” the Board said in a statement.
“Therefore, the government’s report of $9.3 billion in revenue is incomplete until all deferred taxes for fiscal year 2020 have been booked. Treasury’s comparison of June 30 cash revenue to the Certified Fiscal Plan’s projection of revenue that are made under different accounting standards is misleading,” the entity stated.
Meanwhile, the Treasury Department said that on May 9, 2019, the Board certified a Fiscal Plan, that projected $10.4 billion in revenue for the General Fund for Fiscal Year 2020. Then, on May 27, the Board presented a review of the Fiscal Plan, projecting $9 billion in revenue for the fiscal year, representing a reduction of $1.3 billion or 13.4%, compared to the original $10.4 billion projection included in the May 2019 plan.
The Board’s review responded to the setbacks caused by the earthquakes that rattled Puerto Rico in January and the declaration of a state of emergency decreed by the COVID0-19 pandemic in March that forced the partial closure of an important segment of the island’s economy and reduced and altered consumption patterns.
The net reduction in the government’s collection base was more than $1 billion.
Treasury Secretary Francisco Parés compared the collections patterns in two periods before and after the events.
“During the period from July to January of the fiscal year, the performance of the collections reflected vigorous growth, exceeding the original projection by $667 million or 13%. Total revenue achieved for the first seven months of the fiscal year amounted to $5.9 billion, reflecting an increase from the same period last year of $838.3 million, or 16.4%,” Parés said.