Puerto Rico Gov. Alejandro García Padilla said today that unless the commonwealth's legislature passes oil tax increases in the next few days, he would order San Juan's public transit system closed on Dec. 1.
The governor has been trying to get the Puerto Rico House of Representatives and Senate to approve a tax increase on the commonwealth's imported oil. In late October members of his government announced that he intended to increase Puerto Rico's tax on imported oil to $15.50 a barrel from $9.25 a barrel. The increase was, among other things, to support the Integrated Transportation Authority that runs the public transportation authority.
Currently all of the $9.25 goes to the Puerto Rico Highways and Transportation Authority. Of the new total, $6 per barrel would continue to flow to the PRHTA to support its operating costs and for repayment of its bonds. A further $8.25 would go to the Puerto Rico Infrastructure Finance Authority. A final $1.25 per barrel would go to the Integrated Transportation Authority.
However, it has been reported that the governor's proposal is short a few votes in the House.
The House and Senate were called back into special session on Monday, only to adjourn until Monday, Dec. 1.
García Padilla said on Nov. 24 that the Integrated Transportation Authority didn't have the money to make payroll on Dec. 15 for work done starting on Dec. 1, according to a source close to the governor. Accordingly García Padilla said that on Dec. 1 he would stop service on the Urban Train subway system and the Metropolitan Bus Authority that provides public transit bus service. Both systems serve Puerto Rico's biggest city, San Juan, and its suburbs.
The House and Senate could reconvene before Dec. 1, the governor's source said. The governor requires the legislature to approve an acceptable tax increase for the public transit system to continue to operate in December, she said.
The governor has proposed a sale of as much as $2.9 billion in bonds by the Infrastructure Finance Authority. The bond sale would be supported by PRIFA's new oil tax income. Proceeds of the bond sale would be primarily used to pay off the PRHTA's $2 billion debt to the GDB.
