Mayors Association calls for veto of inventory tax freeze

Jayuya Mayor Jorge González Otero, president of the Puerto Rico Mayors Association

By THE STAR STAFF

Puerto Rico Mayors Association President Jorge González Otero called on Gov. Jenniffer González Colón this week to veto the bill that would freeze the inventory tax because, he said, the legislation could cause municipalities to go bankrupt.

The measure has already been approved by the Conference Committee, and it is now up to the governor to decide whether or not to implement it.

“I predict the government will be in disarray, leading to the potential disappearance of municipalities,” said González Otero, who heads the entity that groups Popular Democratic Party mayors. “This will affect us all.”

The Jayuya mayor emphasized that the inventory tax freeze is crucial for funding essential municipal services, including road maintenance, beautification of public spaces, garbage collection and public transportation.

The inventory tax is collected from merchants’ assets and distributed to municipalities, which rely on the funds to provide community services. González Otero criticized the government’s approach, saying, “We are trying to solve a problem but only creating chaos.”

He stressed that without municipalities, the stability of Puerto Rico would be at risk.

“If it weren’t for the municipalities, this country would be in turmoil,” González Otero said. “We wouldn’t be able to live in Puerto Rico. People’s needs are continuing to rise, with requests for services increasing every day. Instead of improving the economic conditions to provide better services to those in need, they keep taking money from us -- taking it right out of our pockets.”

He pointed out that the municipal economy is currently unstable and “living off FEMA projects.” For example, Jayuya, whose budget is nearly $8 million, lost nearly $3 million. The central mountain town had seen its budget drop to $4 million, but with construction taxes, it has managed to recover to about $7 million.

“It feels like we’re riding a bicycle through Niagara Falls,” González Otero said. “Costs keep rising.”

He warned that if the bill becomes law, municipalities will lose millions of dollars, with losses proportional to each town’s production.

The Mayors Association president stressed that towns have been misled in the past and expressed skepticism about the claim that the measure would be temporary until 2028.

“They took away the CELI [Contribution in Lieu of Taxes] from us, promising to replace it with something else, but that never happened,” González Otero said. “They say this is temporary, with measures in place to replace the lost funds, but what are those measures? Where are the solutions? They claim it will be temporary until 2028, but if it doesn’t return by then, I won’t believe it. Once something is conceded, it is very difficult to reclaim.”

“If Governor Jenniffer González truly supports municipalities, she should veto this bill,” he added. “I believe that the president of the [New Progressive Party] Mayors Federation and all mayors aware of the services we provide must demand that this bill be vetoed or insist on finding alternatives to replace the funds we stand to lose.”

A veto appeared less than likely later on Thursday after the governor thanked the Legislative Assembly for approving the inventory tax bill.

“It will be a great relief for consumers to have to pay less for their inventory,” González Colón said at a press conference. “This will also increase the number of products available in Puerto Rico. This was a campaign promise, and I thank the Legislative Assembly for addressing it. Once we receive it, we will evaluate the issue of signature.”

The governor added that the bill had not yet arrived at La Fortaleza, so she has not had the opportunity to evaluate how it was approved.