The following article was published after Gov. Fortuno’s State of the Commonwealth address on Tuesday night. His address highlights many areas in which the current administration has taken drastic measures including: Energy through a new natural gas pipeline, restored and retained credit rating to the island, huge budget cuts reducing the deficit, and a measurable reform to the tax system. But have the changes been felt by the island’s people?
By : JOHN MARINO, Caribbean Business
Gov. Luis Fortuño used his State of the Commonwealth address Tuesday night to highlight his administration’s achievements, telling Puerto Ricans that “in only two years, we have completed our pledge of bringing you a true change of good government.”
The governor said that his administration inherited a government on the verge of insolvency and in two years managed to:
— Stabilize government finances
— Pay off more than $1.5 billion in past bills
— Reduce the $3.3 billion budget deficit by 75%
— Save Puerto Rico’s credit rating and with it thousands of jobs, and the values of homes and individual retirement accounts
— Get positive ratings from credit rating agencies
The governor also discussed several of the reforms his administration instituted over the past two years, including creating a new permit system that makes it easier for everyone, but especially small and midsized businesses, to expand, grow and create jobs, and instituting an energy reform that will reduce Puerto Rico’s excessive dependence on foreign oil in favor of cleaner and safer sources such as natural gas, solar and wind.
The government reform process, meanwhile, is making it easier for citizens and businesses to do business with the government, with some 40 services already moved online.
Another big item the governor highlighted is the Mi Salud health plan, which will be expanded this year to more government workers and uninsured private sector employees working for small and midsized businesses.
“We have stabilized our economy and have begun to see clear signs of a recovery after a lost decade, like the net creation of 27,600 jobs from August to December 2010, the increase in retail and auto sales and the reactivation of the housing market,” the governor said.
A major highlight was the discussion of tax reform which Fortuño enacted last week, calling it the “most important step we have taken in decades to regain our competitiveness and to create jobs in Puerto Rico.”
The tax reform will provide an average $1.2 billion in annual tax relief to individuals and corporations over the next six years. The tax relief will average a 25% cut for individual taxpayers and a 30% cut for businesses in Puerto Rico in 2011. Relief for individual taxpayers will grow to average a nearly 50% cut in their tax burden over six years.
Addressing minority lawmakers who opposed tax reform, the governor noted that the legislation he enacted carries a clause that any taxpayer who chooses can file taxes on the old tax system.
“I’m sure we will be reading on April 16 in the press the story of how this was the choice of each and every one of the members of the minority delegation who voted against tax reform.”
The governor, noting that his administration is halfway through its term and still had much to do, also looked ahead, saying that a flurry of infrastructure projects would also help assure a return to economic progress.
Topping the list is the $756 million “Schools for the 21st Century” project, which will take place over the next two years. Already, $135 million in bids has been awarded, and work has begun on 27 schools.
The governor also reiterated that the $450 million Vía Verde natural gas pipeline would also break ground this year, creating some 5,000 new jobs, and just as importantly shave $1 billion off annual energy costs and cut pollution by 64%. Another big project is a $475 million project to construct the Valencia and Beatriz reservoirs to meet future drinking-water needs, and there are several new mass transit and highway projects.
The governor said the Public-Private Partnership Authority should complete deals involving the De Diego Expressway and the Luis Muñoz Marín International Airport this year.
“Our agenda is ambitious, but you know we will comply with it because the pledge we made to you is sacred,” Fortuño said. “However, the work never stops because your ambitions are eternal.”
“A Puerto Rico that overcomes always aspires to the highest goals. With the help of God, I don’t have the slightest doubt that we will achieve them,” the governor said.
Posted at Caribbean Business PR