House speaker orders review to offset cost of solar tax exemption suspension

Speaker of the Puerto Rico House of Representatives Carlos “Johnny” Méndez Nuñez

PDP senators: Money should come from González Colón administration’s excessive advertising budget

By THE STAR STAFF

Speaker of the Puerto Rico House of Representatives Carlos “Johnny” Méndez Nuñez has directed the chamber’s Treasury Committee to urgently identify recurring funding sources that could replace the roughly $18 million generated by suspending the sales and use tax (IVU by its acronym in Spanish) exemption currently granted to residents who install photovoltaic systems in their homes.

“I’ve been clear on this issue since 2018, when the surge in solar installations began in Puerto Rico,” Méndez said. “These systems not only provide backup during power outages, but their main purpose is to help our people lower their monthly electricity bills. For that reason, I have asked Representative Eddie Charbonier, chair of the Treasury Committee, and his technical team to quickly begin a study to identify the $18 million the Treasury secretary said would result from suspending the exemption.”

The House speaker said some 3,600 solar installations are completed every month on the island, with an estimated 185,600 photovoltaic systems already in place. He described those systems as central to Puerto Rico’s push toward renewable energy and household cost reductions. The study, he added, aims to find a stable source of funds to support a portion of the proposed tax reform -- the first in 15 years and a commitment of the current administration.

Méndez and fellow New Progressive Party Rep. Víctor Parés Otero authored Joint House Resolution 193, which orders LUMA Energy, operator of Puerto Rico’s transmission and distribution system, to immediately cease charging a $300 supplemental study fee to customers installing photovoltaic systems of up to 25 kilowatts.

Méndez also criticized members of the Popular Democratic Party (PDP), accusing them of promoting unrealistic proposals without verified repayment plans, which he said would ultimately amount to new taxes on the public. He pointed to recent proposals from that delegation, including increases in vehicle registration fees and even public employee layoffs, as examples of measures suggested to finance tax reform. Méndez asserted that the PDP “survives on imposing taxes and rejecting proposals that reduce the tax burden,” citing debates from 2017–2020 and June 2023.

Later on Monday, PDP Senate Minority Leader Luis Javier Hernández Ortiz made a new proposal -- that the government can identify $18 million in savings by cutting advertising and public relations contracts, thus avoiding the elimination of the IVU tax exemption on the purchase of residential solar systems.

“We propose that the money come from cuts to the excessive advertising and public relations contracts that this administration has incurred,” Hernández Ortiz said in a written statement.

The PDP leader in the Senate filed the proposal alongside the party’s alternate spokesperson in the upper chamber, Sen. Marially González Huertas, during a press conference held to address the tax changes proposed by the administration of Gov. Jenniffer González Colón.

Hernández Ortiz said that according to data from the Government Contract Registry, the Puerto Rico Tourism Company has spent some $25 million on advertising, representation and artistic services. González Huertas noted that the Governor’s Office has spent some $650,000 annually on photography and public relations services. She added that the island Health Department has spent nearly $1.9 million on advertising contracts, that the Education Department has similarly spent over $800,000 in that area, the Public Safety Department about $315,000, and the Economic Development and Commerce Department around $1.6 million.