Puerto Rico Lawmakers Wrangle Over Boost for PRHTA

Puerto Rico lawmakers are wrangling with Gov. Alejandro García Padilla over ways to boost the finances of the Puerto Rico Highways and Transportation Authority after the governor's plan to raise oil taxes ran into opposition, according to news and analyst reports.

In late October members of García Padilla's government announced that it intended to increase Puerto Rico's tax on imported oil to $15.50 a barrel from $9.25 a barrel.

Currently all of the $9.25 goes to the PRHTA. Under the governor's plan, $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 newly founded public transit authority called the Integrated Transportation Authority.

According to Municipal Market Advisors' Weekly Outlook, the bill was short one vote in the Puerto Rico House of Representatives. This body has 51 members, of whom 28 are members of the governor's party.

"Resistance to the bill comes from various corners: some lawmakers fear the economic impact of a large hike (some advocate a toll increase instead), other prefer to implement the tax increase in conjunction with the coming tax reform, others insist on a HTA reorganization to cut expenses, and powerful companies …  are lobbying hard against the oil tax hikes," MMA reported. Puma Energy, which sells fuel and operates service stations, is among the companies, according to the report.

Several sources said that on Tuesday the governor was negotiating with leaders of the Puerto Rico House and Senate to develop a bill acceptable to all sides.

The PRHTA has operated with an operating deficit for several years, depending on the support of the Government Development Bank for Puerto Rico and Puerto Rico's General Fund.

The governor has proposed having PRIFA sell up to $2.9 billion in bonds. The bond sale would be supported by PRIFA's new oil tax income.

Proceeds would be primarily used to pay off the PRHTA's $2 billion debt to the GDB.

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Transportation industry Puerto Rico
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