The inventory tax, by the numbers

Jayuya Mayor Jorge “Georgie” González Otero is the president of the Puerto Rico Mayors Association.

By JORGE “GEORGIE” GONZÁLEZ OTERO

The current freeze on the inventory tax and its eventual elimination in 2028 is a mechanism that will ultimately be paid for by the citizens of all municipalities in Puerto Rico.

Certainly, there are still citizens who are unaware of the reality of what House Bill 420 means, which is designed to benefit already multimillion-dollar commercial interests at the expense of the services citizens receive. It’s that simple: they eliminate funds without offering any alternative.

Therefore, both our Puerto Rico Mayors Association and our colleagues in the Mayors Federation demand that this bill be returned to the Legislature and the error corrected, because the numbers speak for themselves.

The elimination of the inventory tax means a loss of $17 million annually for the Municipality of Cataño and $3.7 million for Arecibo, according to data from the Municipal Revenue Collections Center (CRIM by its acronym in Spanish). The Municipality of Ponce would lose $16 million annually, and Mayagüez, $11.3 million. Even Puerto Rico’s capital, San Juan, would lose $58.9 million annually with the elimination of this tax.

Municipalities of all sizes will be affected: $2 million annually in the case of Vega Baja and $1.4 million in Vega Alta. Toa Baja would lose $9.8 million and Humacao $4.4 million. Other examples include the Municipality of Carolina, which would lose $26.7 million annually; Manatí, $2.7 million; and Caguas, $18.6 million. According to CRIM data, Bayamón would lose $32.4 million annually, and smaller municipalities would lose amounts such as the following: Adjuntas, $179,018; Aibonito, $648,743; Culebra, $44,180; and Ciales, $147,546 per year.

The elimination of the inventory tax does not mean a decrease in product prices, as Mr. Ramón Barquín III, president of the United Retailers Center (CUD), has admitted in the media. What is certain is that the municipalities will see a drastic reduction in their revenues. Funds for solid waste collection and disposal, public property maintenance crew salaries, public road repairs, sports programs, security, culture, and education are at risk.

Even low-income families who lose a loved one, when seeking assistance with funeral expenses, don’t go to La Fortaleza (the governor’s mansion) or the Legislature: they go to the municipality. For years, municipalities have been cutting expenses, limiting projects and developing consortiums. Added to this is the intention to continue assigning to municipalities the central government’s responsibilities in sectors such as road maintenance and public facilities. All of this directly affects the most vulnerable citizens, who are the ones who suffer the consequences.

They don’t have lobbyists in the Legislature or at La Fortaleza: the elderly, single mothers, the unemployed. These are the real numbers behind the elimination of the inventory tax. Deepening the crisis is not the solution. House Bill 420 must be returned to the Legislature, and things must be done right.

Jorge “Georgie” González Otero is the president of the Puerto Rico Mayors Association and mayor of Jayuya.