Puerto Rico's annual general obligation bond bill could increase to $425 million again after Gov. Anibal Acevedo Vila vetoed a measure last week that would have cut the borrowing plan by $175 million.
Speaker of the House JosÃ© Aponte and Senate President Kenneth McClintock favored a plan to use existing revenues to meet an annual payment of $175 million to the Government Development Bank for Puerto Rico for past Public Improvement Fund loans, totalling $1.2 billion, that the bank extended to the central government. But the administration has said the legislature should follow with current laws that dictate how the government should pay the yearly $175 million PIF payment via the island's annual GO borrowing. In addition, GDB president Jorge Irizarry said because officials are estimating a deficit for fiscal 2008, it's unrealistic for the government to use revenues that could instead help fill the budget gap. In 2006, the government implemented a one-time, 5% flat tax on retirement withdrawals that generated $240 million of revenue.