Despite hurricanes, Puerto Rico revenue was above budget in FY2017

Despite Puerto Rico having been hit by two powerful hurricanes in late summer 2017, Puerto Rico General Fund revenue in fiscal year 2017 was 1.5% higher than budgeted.

Total revenue was $9.31 billion during the fiscal year that ran from July 1, 2017, to June 30, 2018.

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“The level and behavior of tax collections during the past fiscal year in comparison with other years is considered unusual due to the economic effect of hurricanes passing through the island,” said new Puerto Rico Secretary of Treasury Teresita Fuentes.

On Dec. 5, 2017, then-Fiscal Agency and Financial Advisory Authority Executive Authority Executive Director Gerardo Portela Franco said that he expected Puerto Rico’s fiscal year General Fund revenues to be 25% less than budgeted.

Fuentes said that unexpectedly high revenues from April to June had allowed the government to exceed the budgeted number.

“To a large extent the [revenue] increase is attributed to the temporary economic activity of companies associated with recovery tasks and the flow of insurer and federal government money after the hurricanes,” said Puerto Rico Secretary of the Interior Raul Maldonado.

Corporate income tax was the category whose surplus compared to budget, $260 million, was largest.

Income tax revenue totaled $115 million greater than had been budgeted.

On the other hand, sales and use tax was $26 million less than projections from the start of the year.

Fuentes said that many businesses were either closed or operated partially in the weeks following Hurricane Maria and that in the period the sales tax on restaurant food was temporarily eliminated. However, the sales and use tax revenue rebounded in the last quarter. Fuentes pointed in particular to hardware stores and department store sales as having been strong.

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