Puerto Rico's ability to pass on-time budgets is poised to gain traction as the Legislature anticipates voting on a $9.13 billion spending plan for fiscal 2011.

House members are expected to approve the budget today, and the Senate on Friday, according to a Senate aide working closely on the spending plan. The budget would then head to Gov. Luis Fortuño for his consideration, unless the Senate makes last-minute alterations.

Earlier this week, the governor and legislative leaders reached a verbal agreement to balance the budget, which has a $220 million gap, by trimming $60 million from spending and increasing tax collections. The shortfall occurred when the Legislature failed to support Fortuño's video lottery terminal initiative last month.

They expect to boost collections by establishing an amnesty period for property tax scofflaws and increasing enforcement of the sales tax.

The amnesty period will apply to both unpaid property taxes and unregistered property.

"We have a lot of houses in Puerto Rico and property that are not registered" with the government, said Rep. Angel Perez, chairman of the House Treasury and Financial Affairs Committee. "So what they're going to do is open a window so people can come and register" without paying penalties or interest.

Lawmakers anticipate the property tax amnesty will generate a substantial amount of additional revenue, but exactly how much remains unclear.

They are also hoping to drum up additional revenue from sales taxes, simply by doing a better job of collecting the money from venders and merchants. Some business are suspected of not passing on all the taxes they collect from customers for the government. Others may not be charging sales tax at all.

The budget proposal Fortuño submitted in late April already included an anticipated $240 million from stricter sales tax collections. The governor's $9.19 billion proposal was $60 million more than the $9.13 billion plan officials agreed to this week.

If the governor signs the budget by June 30, the commonwealth will begin the fiscal year with an approved spending plan a second year in a row.

Fortuño, Senate President Thomas Rivera, and House Speaker Jenniffer Gonzalez are members of the pro-statehood New Progressive Party.

The NPP-controlled Legislature often clashed with Fortuño's predecessor — former Gov. Anibal Acevedo Vila of the Popular Democratic Party — on budget issues, delaying budget approvals. The PDP supports retaining the island's commonwealth status.

Subscribe Now

Independent and authoritative analysis and perspective for the bond buying industry.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.