CRIM seeks $13.6 million from fiscal board to offset towns’ revenue losses from prescription drug tax exemption
By THE STAR STAFF
The Municipal Revenue Collections Center (CRIM by its acronym in Spanish) has asked the Office of Management and Budget (OMB) to seek approval from the Financial Oversight and Management Board for a disbursement of about $13.6 million to compensate municipalities for revenue losses resulting from the exemption of prescription medications from Puerto Rico’s inventory tax.
In a Nov. 6 letter to OMB Executive Director Orlando C. Rivera Berríos, CRIM Executive Director Javier García Cintrón said the exemption created under Act 78-2025 has reduced municipal revenues by $13.62 million since it took effect.
The legislation, signed into law on July 27, 2025, amended Puerto Rico’s Municipal Code to exempt prescription drugs from personal property taxes, commonly referred to as the inventory tax. According to CRIM’s analysis of personal property tax returns, the “implementation of the law has had a direct effect on municipal finances” across the island, García Cintrón wrote, noting that the legislation did not include an alternative funding source to replace the lost revenues.
CRIM is requesting that the funds be drawn from a $66 million reserve within the Municipal Consolidation Fund that was established under Puerto Rico’s certified fiscal plans and annual general fund budgets. The reserve was specifically created to assist municipalities affected by legislative changes to the inventory tax.
The agency argues that Act 78-2025 falls squarely within the purpose of that reserve because it removed prescription drugs from the inventory tax base, resulting in a quantifiable reduction in municipal collections.
Under the proposal, the $13.62 million would be distributed among Puerto Rico’s 78 municipalities based on the amount of revenue each jurisdiction lost as a result of the exemption. CRIM said it has prepared a municipality-by-municipality breakdown documenting the impact.
“Neither municipality would receive more or less than the amount it stopped collecting,” the letter states.
However, before any funds can be released, the oversight board must determine the eligibility threshold required under the budget resolutions governing the Municipal Consolidation Fund. CRIM therefore asked the OMB to formally submit the request to the board and recommend that the threshold be based on the amount of revenue loss certified by CRIM for each municipality.
The request highlights the continuing tension between efforts to reduce costs in the healthcare supply chain and municipalities’ dependence on inventory tax revenues, a longstanding issue in Puerto Rico’s fiscal policy debates.
If approved, the allocation would provide a one-time replacement of revenue lost because of the prescription drug exemption while helping towns maintain core public services and operations, according to CRIM.
