Puerto Rico's government spending is meeting budgetary projections, according to the director of the Commonwealth's budget office.
"All our agencies are on track," Luis Cruz, director of the Puerto Rico Office of Management and Budget, said in an interview Thursday.
Puerto Rico Gov. Alejandro García Padilla appointed Cruz as director of the office in October, replacing his predecessor Carlos Rivas, who left the position for personal reasons.
Through the first half of the fiscal year revenues have come in 2.5% below budget. However, sales and use tax revenue don't go to the General Fund in the first half of the fiscal year and these have been coming in strong. They may help overall revenues in the second half.
Gov. García Padilla is planning to submit on Feb. 15 a proposal for a complete overhaul of the Commonwealth's tax system to the legislature. Among other things, it will shift the island's emphasis from income taxes to consumption taxes. If adopted, the overhaul will increase revenues to the government, Cruz said. However, the precise shape of the tax proposal and its fiscal haul will depend on what is approved.
Cruz said the government was taking a different approach to creating the following years' budget than had been taken in past years. The departments of education, health, family, corrections, and police account for 80% of the General Fund budget. Cruz and his staff are looking at these departments' outlays program-by-program and line-by-line, he said.
The OMB professionals are looking to see if some of the programs can work with programs in other departments to provide the same services. Cruz said he wanted to see if the OMB can improve services without raising costs.
Cruz is working with Secretary of the Treasury Juan Zaragoza G-mez and Government Development Bank President Melba Acosta Febo to create a balanced budget for fiscal year 2016, Cruz said.
