Puerto Rico Think Tank Starts Web Site, Index on Island's Cities' Finances

A Puerto Rico think tank started a web site and municipal financial index to provide statistics on the island's 78 cities.

The web site, http://fiscal.cipp-pr.org, will provide comparative rankings of the cities, the nonprofit OPEN Puerto Rico, said in a press release Oct. 29. OPEN Puerto Rico is a project of  the Center for Integrity and Public Policy, The site is in English now and will soon have a Spanish option as well, according to Arnaldo Cruz, the cofounder and vice-president of CIPP's board of directors.

The group found that the municipalities were generally in a difficult financial position:

• 70 municipalities have negative net assets (unrestricted);
• 50 municipalities have a general fund deficit;
• 43 municipalities have an accumulated general fund deficit (that is, a negative general fund balance);
• 24 municipalities spend more than 15% of their budget on debt service;
• 40 municipalities receive over 40% of their revenues from the central government;
•  Total long-term debt of the municipalities exceeds $5 billion.

 The site provides the financial rank of each of the municipalities overall and on different measures.
The Puerto Rico municipalities in the worst shape, according to CIPP, were Ponce, Maunabo and Yabucua, all of which are on the southern coast. While the latter two are small, Ponce is Puerto Rico's fourth largest municipality with a population of 156,000. It has a long-term debt of $322 million.

OPEN Puerto Rico simultaneously announced the launch of a Municipal Financial Health Index for all 78 municipalities.

 "With this index we are providing a new measurement tool that will allow residents to compare their municipality to the others on the island utilizing a series of standardized financial indicators," Cruz said in the press release. "Mayors can often arrive at their own conclusions about the financial health of their municipality, but now they can do it using the index and its underlying indicators and data that is information that can be independently verified."

The financial information on the site is up to date to the fiscal year 2013. Over time as new data becomes available, OPEN Puerto Rico will update the financial information and the index values.

The index values are based on a statistical analysis of 13 financial indicators and how municipalities compare to the current Puerto Rico municipal averages. The indicators of short-term financial health have a greater weight than the long-term measures, Cruz said. The index can take positive and negative values with no particular maximum or minimum value. It indicates how far each city or town is from the mean financial condition of the Puerto Rico municipalities. Positive values indicate the municipalities are better than average and negative values show the reverse.

The index values are currently not on the web site proper but in a Spanish language paper that is linked to on the web site. In the next few months the the index values will be added to the Web site, Cruz said.