Robb Rill

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Por Robb Rill
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Protecting the jobs, before it’s too late

Most 20/22 Act recipients have been too comfortable with the fact that Acts 20 and 22 never seemed to be really at risk of removal or major modification (although there have been small changes to the program). I’ve commented numerous times about how perception can become reality, and how the perception of many locals was negative as a gift to the wealthy. 

When I flew back to the Island on October 31st, the term trick-or-treat took on a new meaning. Late into the night, an anticipated local tax reform passed through HB 1544 (sponsored by Senator Antonio “Tony” Soto), with a last-minute amendment tacked on which effectively would’ve killed the program with a sunset provision. 

My phone blew up the next morning with cries for help as to what was the community going to do. This version of crisis management is hard to address when it’s so unexpected, yet warning signs have been there since 2015 when a Senator got headlines saying he was going to kill the program. The early intel I received said the bill would likely pass the Senate as the tax reform bill was too important. Without getting into a blow by blow, a small collection of vested stakeholders pulled together to advocate as strongly as possible why this was catastrophic for Puerto Rico. 

Despite counter arguments, i.e. incremental income in the tens of millions annually in tax revenue, direct investment in real estate in excess of $1 billion (John Paulson and Keith St. Clair together are probably at that figure alone) directly absorbing properties at risk of foreclosure, and the multiplier effect touted by economists that every dollar of investment is multiplied 10 times indirectly by the velocity of that money throughout the economy (possibly more than 10x). What about the well over 10 thousand (mostly professional) jobs at an average wage of $45,000? The millions of dollars given annually through charitable initiatives, now required by grants? 

All these arguments are logical and factual, yet they don’t resonate with the average educated local, much less the average man on the street who doesn’t care. These are people politicians pander to for votes, not guys like us who are a very small part of their constituency. 

Is the program not effective? No. The problem is optics, and we have done a terrible job. These facts supporting the program are seldom heard, much less believed. The program has a public relations problem only solved collectively, not just by a handful of public advocates. When I’m told the program should be made available to locals, I respond any local can apply Act 20. I hear crickets. They don’t know this. When I say any local off the island from 2006-2012 can do Act 22, I get a stunned silence. When we donate millions to charities, nobody knows, but if we put out a press release it will appear as self-aggrandizing.  

For those that don’t know the end of the story, we got HB 1544 amended, and all is well again, right? No. The problem remains. How do we fix this?  As recently as last week a letter was sent by 34 Democratic congressman to the Junta asking them to eliminate the 22 Program. While the 20/22 Act Society has always had an advocacy role, we need to broaden the base of responsibility. We also need an effective campaign to educate the everyday person on the program’s importance and why it matters to them. The average resident of the US Virgin Islands whose incentives program is not even 1/10th of ours in size, realizes the importance of such contributions and their perception is very different. 

People ask me what they can do to help. Well, already 1,500 recipients need to be direct advocates and should memorize just the basic facts outlined here. Thousands of direct employees of Act 20 companies need to do the same. They are our best advocates. The same goes for hundreds of service providers, some of which rely almost exclusively on 20/22 business.  Without proactive advocation, we risk losing all that has been built and benefited from over the last seven years and everyone pays the consequences whether they realize it or not. 

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