Federal uncertainty undermines local growth

The possibility for Puerto Rico to overcome its fiscal and economic stagnation is in the hands of the U.S. government that could release a multimillion-dollar relief package Congress approved almost two years ago after Hurricane María struck the island in 2017.

The Puerto Rican people need the federal government to use its sense of urgency to resolve the uncertainty arising from the delay in funds disbursement. That package includes $8.225 billion authorized in February and that should have been released last summer.

Addressing this crucial issue also requires prompt and decisive action by the government of Puerto Rico to demand that federal agencies comply with the design of the guidelines that allow disbursements.

The fact that the U.S. Department of Housing has not published guidelines on the use of those funds, which Secretary Ben Carson promised months ago, resulted in the delay in disbursing those funds. And that the financial monitor that will oversee the money, announced four months ago, has not been appointed.

The more than three million U.S. citizens of Puerto Rico do not deserve any more delays in the disbursements of the funds destined to them.

The $8.225 billion package is part of more than $20.5 billion in CDBG-DR program funds allocated two years ago. Of that total, the federal Housing Department has only disbursed $1.507 billion. According to the government's plan, 42 percent of those funds will go to housing recovery and development projects. And 32 percent of this money will be used for infrastructure development and economic recovery projects.

Other key issues for the island are also plunged into federal uncertainty. This is the case of new Medicaid allocations that the Puerto Rican government has urged to include in the spending bill that Congress must approve this month. Without a new injection into federal funding, funds will only last until February. Inaction jeopardizes services for nearly half of the 1.25 million public health plan participants.

On the other hand, the island needs clarity regarding the 4 percent federal credit tax on foreign companies operating in Puerto Rico. That tax brings about $2 billion annually to the local Treasury, that is, more than 20 percent of the net income of the General Fund and about 12,000 jobs.

Congress members have spoken out demanding urgent federal responses to Puerto Rico's critical situations. The local government hired a firm to lobby for CDBG-DR funds. In the Medicaid case, Governor Wanda Vázquez wrote to Congress warning of the consequences of not addressing the request for more funds. But convincing Washington about taking urgent action demands more proactivity. And our government must take the necessary steps to prevent more predictable impacts on the economy and the island.

The cruise industry has pointed out the apparent lack of swift action by local authorities. The government plans to meet with the sector soon after weeks of claims and complaints.

It is necessary to explore all possibilities for the federal government to fulfill its duty to respond to its citizens in Puerto Rico with the support of the private sector and the diaspora in the United States. It is urgent that –timely and sensitively- Washington puts an end to this uncertainty that damages Puerto Rico and its economic growth.