And You Thought Our Government Was F'ed

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Originally uploaded by hattie collins.

Incredible as it may seem, the government in Puerto Rico has announced it doesn't have much money right now so, hey, sorry schools have to close, civil servants won't get paid and, well, whaddya gonna do. I've been lucky to visit that beautiful country twice now (thanks Missy!) and while I saw the beaches, blue skies and cutesy little Spanish style villages, it's also obvious this is a poor country with more than its fair share of problems. There's a lot of violence and poverty which is kept out of the way of tourista's in general but it's right there behind the 5-star hotels, luxury golf-courses and health spas. So, while this would be bad news for any country, it's going to be particularly tough, I imagine for PR.
Anyway, I don't really know enough so I'll leave it the associated press report below to explain what's happening out there.

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SAN JUAN, Puerto Rico (AP) -- Puerto Rican lawmakers failed to resolve the U.S. commonwealth's budget impasse, extending into Tuesday a partial government shutdown that has closed public schools and thrown nearly 100,000 people out of work.


The governor and legislature remained at a stalemate.
Gov. Anibal Acevedo Vila said he would agree to a lower sales tax than he had previously said was necessary to secure an emergency line of credit to finish out the fiscal year, but the Senate and House of Representatives did not offer a proposal.

The island currently has no sales tax.


All 1,600 public schools on the island closed Monday, two weeks before the end of the academic year, along with 43 government agencies.


Many basic functions of Puerto Rico's government -- such as obtaining building permits or a driver's license -- were not available because of the shutdown, which the governor said was necessary because the island did not have enough money in its budget to get through the fiscal year ending June 30.


The most obvious sign of the shutdown was significantly fewer cars on San Juan's usually clogged highways, and government employees said they were already starting to fear what could happen if the situation drags on.


"In big or small ways, this affects us all," said Magaly Rosario, a 21-year-old teacher and mother of two boys. "The uncertainty is huge."
The island closed the public schools, granting an unscheduled holiday to 500,000 students -- and leaving many teachers suddenly without a paycheck.


Lines formed at the Labor Department, which remained opened so people could apply for unemployment benefits of up to $133 a week.


Angel David Salgado Rodriguez, a 21-year-old driver for the Housing Department, said he hoped the crisis would end soon since he was getting married in a month.


"I am up to my neck [in debts]. If this doesn't get resolved, I am going to look for another job on the side and fend for myself because I can't do much with $133," he said.


The government is Puerto Rico's largest employer, with some 200,000 workers. Salaries make up about 80 percent of the government's operational costs.


The shutdown -- the first in Puerto Rico's history -- happened despite last-minute attempts by Acevedo and lawmakers to agree on a bailout plan.


Puerto Rico is saddled with a $740 million budget shortfall because the governor and lawmakers have been unable to agree on a spending plan since 2004. Conflicting sales tax proposals have been floated that would allow the island to secure a line of credit to pay public salaries through June 30.


Acevedo had insisted that a 7 percent sales tax was necessary to pay for an additional $640 million loan. Anything less than 7 percent would only postpone the crisis until July 1, when the next fiscal year begins, he said.


The governor now says he would be willing to accept a 5.9 percent sales tax -- the amount offered under one Senate proposal.
Leaders in the House of Representatives said they would support a 4 percent sales tax.


Members of the New Progressive Party, which controls the legislature, have blamed the governor for the crisis. The two sides never agreed on the 2005 or the 2006 budgets, and the government is using the 2004 budget to operate as debts pile up.