By The Star Staff
Coamo Mayor Juan Carlos García Padilla demanded on Monday that Gov. Pedro Pierluisi Urrutia and the Financial Oversight and Management Board for Puerto Rico explain the economic plan for the island’s municipalities in light of the elimination of the Equalization Fund and funds from the American Rescue Plan Act (ARPA) of 2021. García Padilla warned that between 30 and 35 municipalities could close operations due to economic insolvency with the approval of the new government budget.
“There are Associated [Popular Democratic Party-led] and Federated [New Progressive Party-led] municipalities that will be forced to cease operations,” García Padilla said in a written statement. “The governor and the [oversight] Board have to inform us of the final decision. They cannot continue talking about economic band-aids that do not resolve the critical situation and the effect on essential services to the communities.”
The mayor said the economic impact will begin to be felt this fiscal year and will intensify starting in January 2025. He added that the Essential Services Fund and other allocations for municipal property and school maintenance do not solve the lack of operational funds, which also puts millions of dollars in reconstruction projects at risk.
García Padilla pointed out that although many towns are making the structural changes requested by the oversight board and maximizing municipal revenue collections, they will not be able to survive budgetarily.
“It is contradictory to leave municipalities without operational funds in the middle of a recovery process where millions of dollars could be lost in projects that depend on the financial solvency of the municipalities that [in turn] allows the continuity of management work,” he said.
The mayor noted that the Equalization Fund was created along with the law establishing the Municipal Revenue Collections Center -- commonly known as CRIM, its acronym in Spanish -- to ensure that all municipalities received the necessary funds for basic services such as garbage collection, safe streets, sports, care for the elderly, and cultural and economic development. However, the oversight board eliminated the fund to balance the central government budget.
“We, the municipalities, are the ones who solve everything in the country,” García Padilla said. “While the central government collapses and makes all basic services more expensive, we continue to solve them with leftover crumbs, to the detriment of the people who need them the most. The elimination of this fund goes directly to the essential services of the population. We demand that they speak out, that they meet with the mayors and tell us the real plans, the truth.”
The Equalization Fund has accounted for more than 30% of the budget in at least 17 of 78 municipalities. In 2022, 52% of Adjuntas’ budget came from the equalization fund, followed by Maunabo (51.3%), Florida (50.6%), Loíza (48.2%), and Comerío (47.1%). In 2023, Comerío topped the list with 39.7% of its budget coming from the fund.
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