In the midst of the deepest financial crisis in its history, Puerto Rico has begun to cut spending by…increasing the size of its budget. El Vocero reports this morning the new budget being sent to the legislature is some 250 million dollars higher than last year’s spending plan.
The new plan is to spend 9.8 billion vs 9.5 billion last year.
The breakdown of the spending plan is equally troubling. 1.5 billion dollars will go to debt service alone. Meaning the island is spending more than ten percent of its total budget on paying maintaining its debt load. 4.2 billion will go to government operations, while another 4 billion will go to ‘special assignments.’
I’m beginning to see where money can be saved.
Despite promises to the contrary, the new budget does include small cuts for both the police department and Agriculture. The education department will get 400 million dollars less thanks in part to the recent decision to close 95 schools across the island.
There will be some realignment of government agencies and other minor savings, but overall the spending plan is larger that last year’s budget. Reports also indicate that the island will take its lower than junk credit rating to the markets AGAIN to seek short term financing AGAIN.
I guess 73 billion dollars in debt for which the island is asking bankruptcy protection just isn’t enough debt. Who will lend the island this money? Who would be so foolish as to continue to drop money into the abyss of the current government?
The PR legislature is expected to vote today on a revised tax plan that includes an increase in the sales tax to over 11 percent. This amid more reports of plant closings and layoffs.
Once again the commonwealth government says one thing and then does something even worse. A higher level of incompetence has never been seen under the American flag.
You just can’t make this stuff up.
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