Mayors welcomed the proposal to leave property tax assessment and collections in the hands of municipalities.
However, according to several new progressive and popular (parties) municipal executives interviewed by El Nuevo Día, they are still debating how to make that into a viable proposal.
The fiscal crisis and the loss of $350 million in subsidies from the central government starting July 1, 2017, has forced municipalities to look for options to add money to their coffers. To that end, the Legislature is about to work on a bill of law to strip the Municipal Revenue Collection Center (CRIM, by its Spanish acronym) of the function to collect and assess the property tax.
“I think it’s good given the problems the CRIM has faced since its inception... It’s commendable that several of the functions of the CRIM should be decentralized and fall on municipalities who have the infrastructure to carry out these functions. Aibonito has it,” said the mayor of that town, William “Willie” Alicea Pérez.
The mayor of San Germán, Isidro Negrón, who was a member of the CRIM’s board of directors for eight years, stated that the inefficiency of that corporation is obvious when one looks at its results.
According to the CRIM’s financial statements for 2016, just in property (taxes) alone, It has $2,764 millions in accounts receivable.
“From 2000 to date the CRIM has been provided with stability and people with trust. But collections is still a weak area, because there is no personnel to collect on delinquent payments. The custom was to hire someone to tend to the CRIM’s debt throughout the country. There were efforts, which only got to large debtors, but the small ones, which could be collected on quickly, were not pursued because the target was the large ones,” he said.
To Negrón, municipalities should be left not only with the task of assessing and collecting, but also with seizing properties and (bank) accounts. “That we may collect on those delinquent debts so they don’t become bad debts. Any municipality lacking the capability, we are willing and able to support and to establish consortiums,” he said.
But, it is precisely, the implementation of this initiative that seems to be the main obstacle among mayors. Some favor the consortiums, others, who lack the municipal structure to take on the tasks of the CRIM, would rather create it, and some lean toward hiring a private company.
The mayor of Aibonito favors consortiums. By way of example, he said that he has one with Comerío and Barranquitas for the granting of permits. The office is located in Barranquitas, who receives 50% of the revenues, with the remaining 50% being divided between Aibonito and Comerío based on the municipality issuing the permit. This set up, the mayors said, is not only practical, but also results in savings given that operating the office costs $200,000 a year. That is the cost for a similar office in each municipality.
The mayor of Comerío, Josean Santiago, pointed to the mechanism as ideal to assume the functions of the CRIM. But he warned that there is a fundamental challenge.
“Leaders have to be unselfish about it because, then comes the discussion as to (which of the municipalities lead the consortium), where will be office be located, and who will make the appointments, and that requires being unselfish,” he warned.
Likewise, he said that, regardless of the model adopted, if the legislation is finally passed to strip the CRIM of some of its functions, the Compensation Fund must not be eliminated, because it allows for the distribution of revenues with a certain equity among large and small municipalities, thanks to a formula.
Other mayors such as that of Adjuntas and Hatillo, Jaime Barlucea Maldonado and José “Chely” Rodríguez, respectively, prefer acquiring technology and the human resource to collect and assess property taxes.
Rodríguez rejected this being an expense in austere times. “It’s an investment. It’s not going to be a recurrent expense. Once done, it’s there for the future,” he said.
“The project’s intention is good, but we must come up with a way to implement it,” warned, for his part, the mayor of Adjuntas.
His peer from Naguabo, Noé Marcano Rivera, said that “if there are municipalities lacking that structure, it could be done through contracting.”
“Looking for private companies to do that job. There are several ways of doing it. One way would be to contract on a per contingency basis, and pay on collections made,” he said.
Now then, he recalled that during the most recent meeting of the CRIM’s Board of Directors, the president and mayor of Cidra, Javier Carrasquillo, asked for and received a vote of confidence to startup his plan on making the corporation efficient, through the use of technology and the support from municipalities.
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