The Puerto Rico government's money shortage has forced it to slow the issuance of income tax refunds.
Puerto Rico chief of staff Victor Suárez Meléndez said some refunds may be delayed beyond July 31, according to the governor's office.
The government today paid off of a $200 million tax and revenue anticipation note and made payroll, according to the El Vocero news website, leaving less money available for other purposes.
In early May Puerto Rico issued a financial report stating that the government's liquidity situation was getting tight. In the report Puerto Rico indicated that the commonwealth could pay off its debts in the rest of the fiscal year, which ends on July 1. However, the report cited concerns over its ability to pay off all its debts in July and August. The administration is seeking to get a balanced budget through the legislature so that it can sell a $2.9 billion bond to rebuild liquidity, which could be used to make those payments.
On May 29 Gov. Alejandro García Padilla signed a measure to increase the island's sales and use tax to 11.5% from 7%.
"With this consensus measure the difficult fiscal situation facing the Government of Puerto Rico has been mitigated," Suárez Meléndez said after the signing. "Now we will turn to adopting a balanced budget and implementing austerity measures to ensure essential services and projects for our development as a people."
The Puerto Rico Senate is now holding hearings on the budget. The legislature is seeking a way of cutting discretionary spending by $674 million to balance the budget.
