Government of Puerto Rico
Encyclopedia
The Government of Puerto Rico
is a republican
form of government
subject to U.S. jurisdiction and sovereignty. Its current powers are all delegated by the United States Congress
and lack full protection under the United States Constitution
. Puerto Rico's head of state is the President of the United States
.
The Government is composed of three branches: the executive, the legislative, and the judicial branches. The executive branch is headed by the Governor
, currently Mr. Luis Fortuño
. The legislative branch consists of a bicameral Legislative Assembly
made up of a Senate
upper chamber and a House of Representatives
lower chamber. The Senate is headed by the President of the Senate, while the House of Representatives is headed by the Speaker of the House. The judicial branch is headed by the Chief Justice of the Puerto Rico Supreme Court. The legal system is a mix of the civil law
and the common law
systems. The governor and legislators are elected by popular vote every four years. Members of the Judicial branch are appointed by the governor with the "advice and consent" of the Senate.
Article III of the Puerto Rico Constitution grants all legislative powers of the national government to the Legislative Assembly of Puerto Rico, which is divided into two chambers: a 27 member Senate
and a 51 member House of Representatives
. The chambers are presided over by the Senate President and the Speaker of the House, respectively. Both positions are occupied by an active member of each body, elected by a majority of both chambers. The current heads are Senator Thomas Rivera Schatz
and Representative Jennifer Gonzalez
, respectively.
Members are elected to both chambers in general elections
held every four years, along with the elections for the Governor and the 78 municipal mayor (Alcalde
in Spanish) positions. Each member represents an electoral district
, with the exception of a number of Senators who are considered “at-large” (Por Acumulación in Spanish) and represent the island as a whole. Members representing specific districts are elected by the citizens residing within the district, while “at-large” Senators are elected by accumulation of all island votes for a specific political party.
). The reasons for this proposed change is based on the growing public opinion that members of the assembly are overpaid, and that a smaller assembly may achieve the same work results as the current one with less public expenditures. However, an official report of 1995 indicates that this argument should not be considered the primary objective because the savings are not significant. The legislative spending in Puerto Rico, compared with the consolidated government budget is less than 1% of total government spending.
In a referendum
held on July 10, 2005, Puerto Rican voters approved the change to a unicameral legislature
by 456,267 votes in favor, versus 88,720 against. (Voter turnout
was 22.6% of the electorate.)
is the Governor of Puerto Rico, who is elected every four years in a general election. The position is similar in nature, responsibility, and power as those of a governor of a U.S. State. The position of Governor has the overall responsibility of the state of the commonwealth, equivalent to the state of the union in the U.S. The official residence of the governor is La Fortaleza
.
The Governor has the authority to nominate agency heads, trial and appellate judge
s, as well as Supreme Court justice
s and directors of public corporations, although these must be confirmed by the Senate and, in a handful of cases, the House, as well.. Similar to a U.S. State, the Governor has authority over the Puerto Rico National Guard.
Although Puerto Rico does not have the position of Lieutenant Governor
, sections 7 and 8 of the Constitution empower the Secretary of the Puerto Rico State Department to act as Governor, should the governor be absent from Puerto Rico, become temporarily disabled or unable to discharge his/her duties.
created by the legislative assembly to deal with specific areas of national and international affairs. The heads of the departments, chosen by the governor and approved by the Senate, form a council of advisers generally known as the Governor's Cabinet.
The Constitution provides for the creation of at least 8 departments: Departments of State, Justice, Education
, Health, Treasury, Labor, Agriculture, Commerce, and Public Works. However, due to the increase in population, economy, and public needs over the years, the Puerto Rico government has expanded the executive branch by establishing additional executive departments not specified in the Constitution. These additional departments are established by public law, as approved by the legislative assembly.
The title of Secretary
is given to the heads of the executive departments, whose position is also created by statute. Cabinet member is another title primarily given by the media and the public, though it is considered unofficial. All cabinet-level Secretaries are first nominated by the Governor and are confirmed by the legislative assembly.
Each department has different divisions, agencies
, bureaus
, office
s, and service
s, each with specific duties, in order to provide the necessary services to the general public across the island.
. Each corporation is headed by an Executive Director who is appointed by the corporations’ Board of Directors
. The directors are nominated by the Governor and confirmed by the state legislative assembly.
Although public corporations are separate from the commonwealth government, who generate their income and expenses independently, several of those have faced financial troubles, and have constantly relied on so called “bail-outs” from the commonwealth to offset recurring losses and deficits. The most famous of these cases was the Puerto Rico Aqueduct and Sewer Authority (PRASA), which faced annual recurring losses in the ranges of hundreds of millions of dollars and required several bail-outs to avoid bankruptcy. While some have mistakenly referred to these bail-outs as loans, they are in fact transfers of equity because the commonwealth does not expect repayment in the future.
Public corporations have the advantage of issuing separate securities, such as bonds
, in the trading market to obtain capital. This is done so that the corporations may finance public works and improvements without having to rely on the commonwealth’s credit. However, as in the case of PRASA, some public corporations have had serious financial difficulties which excluded them from the bond market, and have had to resort to commonwealth bonds to make capital additions and improvements.
The Supreme Court
, the commonwealth's highest court holds its sessions in San Juan's
Miramar district.
and federal aid from the United States. A substantial portion of this amount is earmarked for public welfare, including funding educational programs (such as Head Start), subsidized housing programs (such as (Section 8
and public housing projects
), and a food stamp system called the Nutrition Assistance for Puerto Rico
program.
Public corporations generate approximately $6.3 billion in general revenues by charging citizens for the services they provide. The largest public corporation, the Puerto Rico Electric Power Authority (PREPA), generates almost half of those revenues alone ($3 billion). However, public corporations generate about $10.6 billion in expenses when combined, requiring substantial subsidies by the central government. In 2005, the central government provided more than $2.6 billion in subsidies, while the remaining expenditures were funded through interest and investment earnings.
When considering all three branches of government, including all public corporations and municipalities, the government of Puerto Rico’s annual expenditures can reach to more than $28 billion.
, plus a municipal sales tax of 1.5%, for a total of 7%, in what has been known as the Puerto Rico Tax Reform. This change was partly due to the government’s growing expenditures and fiscal deficits which remained unchecked and uncorrected for several years, until several credit agencies warned public officials that all general-obligation bonds
issued by the government were to be downgraded if the problem was not corrected. The situation reached a turning point when the executive branch of the government was partially shutdown, the events now known as the 2006 Puerto Rico budget crisis
. Thirty-three (33) agencies were closed and 95,762 employees were sent home without pay. Following public bickering between the two main political parties, the new sales tax was approved in favor of the excise tax on imports on May 10, 2006, ending the budget crisis.
and welfare ($3.4 billion or 19%), public safety ($2.5 billion or 14%) and public health ($2.3 billion or 13%).
Recently, several political analysts and commentators have pointed to the fact that the government of Puerto Rico is subject to an unreasonable amount of legal claims and court judgments, including some from political harassment allegations and accusations and others from health reform
disputes. In 2005, these claims amounted to $11.7 billion, leading some to believe that if current trends continue, such claims may be too much to pay if they are found against the government.
In May 2007, local economists expressed serious concerns when it was revealed that the Puerto Rico public debt equaled 76% of its gross national product (GNP), making it one of the most indebted countries by percentage in the world, even more than the United States. Economists have criticized the government's fiscal policy, whose level of expenditures and indebtness has increase significantly within the past decade while the economy was grown at a much slower pace. Between 2000 and 2006 alone, Puerto Rico's GNP rose 5.37%, while its public debt's relation to GNP rose 18%. By comparison, many other Latin American countries have seen reductions in their GNP-public debt percentages during that same time period.
Puerto Rico
Puerto Rico , officially the Commonwealth of Puerto Rico , is an unincorporated territory of the United States, located in the northeastern Caribbean, east of the Dominican Republic and west of both the United States Virgin Islands and the British Virgin Islands.Puerto Rico comprises an...
is a republican
Republicanism in the United States
Republicanism is the political value system that has been a major part of American civic thought since the American Revolution. It stresses liberty and inalienable rights as central values, makes the people as a whole sovereign, supports activist government to promote the common good, rejects...
form of government
Government
Government refers to the legislators, administrators, and arbitrators in the administrative bureaucracy who control a state at a given time, and to the system of government by which they are organized...
subject to U.S. jurisdiction and sovereignty. Its current powers are all delegated by the United States Congress
United States Congress
The United States Congress is the bicameral legislature of the federal government of the United States, consisting of the Senate and the House of Representatives. The Congress meets in the United States Capitol in Washington, D.C....
and lack full protection under the United States Constitution
United States Constitution
The Constitution of the United States is the supreme law of the United States of America. It is the framework for the organization of the United States government and for the relationship of the federal government with the states, citizens, and all people within the United States.The first three...
. Puerto Rico's head of state is the President of the United States
President of the United States
The President of the United States of America is the head of state and head of government of the United States. The president leads the executive branch of the federal government and is the commander-in-chief of the United States Armed Forces....
.
The Government is composed of three branches: the executive, the legislative, and the judicial branches. The executive branch is headed by the Governor
Governor of Puerto Rico
The Governor of Puerto Rico is the Head of Government of the Commonwealth of Puerto Rico. Since 1948, the Governor has been elected by the people of Puerto Rico...
, currently Mr. Luis Fortuño
Luis Fortuño
Luis Guillermo Fortuño Burset is the governor of the Commonwealth of Puerto Rico, a territory of the United States of America. Fortuño is also the president of the New Progressive Party of Puerto Rico , a member of the Republican National Committee, and will be president of the Council of State...
. The legislative branch consists of a bicameral Legislative Assembly
Legislative Assembly of Puerto Rico
The Legislative Assembly of Puerto Rico is the territorial legislature of the Commonwealth of Puerto Rico. The structure and responsibilities of the Legislative Assembly are defined in Article III of the Constitution of Puerto Rico....
made up of a Senate
Senate of Puerto Rico
The Senate of Puerto Rico is the upper house of the Legislative Assembly of Puerto Rico, the territorial legislature of Puerto Rico. The Senate is composed of 27 senators, representing eight constituent senatorial districts across the commonwealth, with two senators elected per district; an...
upper chamber and a House of Representatives
House of Representatives of Puerto Rico
The House of Representatives of Puerto Rico is the lower house of the Legislative Assembly of Puerto Rico, the territorial legislature of Puerto Rico...
lower chamber. The Senate is headed by the President of the Senate, while the House of Representatives is headed by the Speaker of the House. The judicial branch is headed by the Chief Justice of the Puerto Rico Supreme Court. The legal system is a mix of the civil law
Civil law (legal system)
Civil law is a legal system inspired by Roman law and whose primary feature is that laws are codified into collections, as compared to common law systems that gives great precedential weight to common law on the principle that it is unfair to treat similar facts differently on different...
and the common law
Common law
Common law is law developed by judges through decisions of courts and similar tribunals rather than through legislative statutes or executive branch action...
systems. The governor and legislators are elected by popular vote every four years. Members of the Judicial branch are appointed by the governor with the "advice and consent" of the Senate.
Legislative branch
Senate of Puerto Rico
The Senate of Puerto Rico is the upper house of the Legislative Assembly of Puerto Rico, the territorial legislature of Puerto Rico. The Senate is composed of 27 senators, representing eight constituent senatorial districts across the commonwealth, with two senators elected per district; an...
and a 51 member House of Representatives
House of Representatives of Puerto Rico
The House of Representatives of Puerto Rico is the lower house of the Legislative Assembly of Puerto Rico, the territorial legislature of Puerto Rico...
. The chambers are presided over by the Senate President and the Speaker of the House, respectively. Both positions are occupied by an active member of each body, elected by a majority of both chambers. The current heads are Senator Thomas Rivera Schatz
Thomas Rivera Schatz
Thomas "Tommy" Rivera Schätz is a Puerto Rican politician currently serving as the fourteenth President of the Senate of Puerto Rico. He is affiliated with the pro-statehood New Progressive Party of Puerto Rico and the United States Republican Party...
and Representative Jennifer Gonzalez
Jennifer González
Jenniffer A. González Colón is a Puerto Rican politician who serves as the Speaker of the House of Representatives of Puerto Rico, a commonwealth with the United States. She is affiliated with the pro-statehood New Progressive Party of Puerto Rico and the United States Republican Party...
, respectively.
Members are elected to both chambers in general elections
Elections in Puerto Rico
Elections in Puerto Rico gives information on election and election results in Puerto Rico.Puerto Rico elects on state level a governor and a legislature. The island's governor is elected for a four year term by the people....
held every four years, along with the elections for the Governor and the 78 municipal mayor (Alcalde
Alcalde
Alcalde , or Alcalde ordinario, is the traditional Spanish municipal magistrate, who had both judicial and administrative functions. An alcalde was, in the absence of a corregidor, the presiding officer of the Castilian cabildo and judge of first instance of a town...
in Spanish) positions. Each member represents an electoral district
Electoral district
An electoral district is a distinct territorial subdivision for holding a separate election for one or more seats in a legislative body...
, with the exception of a number of Senators who are considered “at-large” (Por Acumulación in Spanish) and represent the island as a whole. Members representing specific districts are elected by the citizens residing within the district, while “at-large” Senators are elected by accumulation of all island votes for a specific political party.
Unicameralism
In recent years, various organizations have pushed for changing the legislative assembly from the current 2 chamber system (House and Senate) to 1 chamber (unicameralismUnicameralism
In government, unicameralism is the practice of having one legislative or parliamentary chamber. Thus, a unicameral parliament or unicameral legislature is a legislature which consists of one chamber or house...
). The reasons for this proposed change is based on the growing public opinion that members of the assembly are overpaid, and that a smaller assembly may achieve the same work results as the current one with less public expenditures. However, an official report of 1995 indicates that this argument should not be considered the primary objective because the savings are not significant. The legislative spending in Puerto Rico, compared with the consolidated government budget is less than 1% of total government spending.
In a referendum
Puerto Rican unicameralism referendum, 2005
In a referendum held on July 10, 2005, Puerto Rican voters approved the change to a unicameral legislature by 456,267 votes in favor, versus 88,720 against. However, another referendum would have to be held to approve the specific amendments to the Constitution of Puerto Rico that are required for...
held on July 10, 2005, Puerto Rican voters approved the change to a unicameral legislature
Unicameralism
In government, unicameralism is the practice of having one legislative or parliamentary chamber. Thus, a unicameral parliament or unicameral legislature is a legislature which consists of one chamber or house...
by 456,267 votes in favor, versus 88,720 against. (Voter turnout
Voter turnout
Voter turnout is the percentage of eligible voters who cast a ballot in an election . After increasing for many decades, there has been a trend of decreasing voter turnout in most established democracies since the 1960s...
was 22.6% of the electorate.)
Executive branch
Executive branch is responsible for administering public resources, as well as providing all necessary public services to the Puerto Rican general public. It is by far the largest branch in the government as well as the largest employer in Puerto Rico with more than 300,000 workers.Governor
The head of governmentHead of government
Head of government is the chief officer of the executive branch of a government, often presiding over a cabinet. In a parliamentary system, the head of government is often styled prime minister, chief minister, premier, etc...
is the Governor of Puerto Rico, who is elected every four years in a general election. The position is similar in nature, responsibility, and power as those of a governor of a U.S. State. The position of Governor has the overall responsibility of the state of the commonwealth, equivalent to the state of the union in the U.S. The official residence of the governor is La Fortaleza
La Fortaleza
La Fortaleza is the current official residence of the Governor of Puerto Rico. It was built between 1533 and 1540 to defend the harbor of San Juan. The structure is also known as Palacio de Santa Catalina . It is the oldest executive mansion in the New World...
.
The Governor has the authority to nominate agency heads, trial and appellate judge
Judge
A judge is a person who presides over court proceedings, either alone or as part of a panel of judges. The powers, functions, method of appointment, discipline, and training of judges vary widely across different jurisdictions. The judge is supposed to conduct the trial impartially and in an open...
s, as well as Supreme Court justice
Justice
Justice is a concept of moral rightness based on ethics, rationality, law, natural law, religion, or equity, along with the punishment of the breach of said ethics; justice is the act of being just and/or fair.-Concept of justice:...
s and directors of public corporations, although these must be confirmed by the Senate and, in a handful of cases, the House, as well.. Similar to a U.S. State, the Governor has authority over the Puerto Rico National Guard.
Although Puerto Rico does not have the position of Lieutenant Governor
Lieutenant governor
A lieutenant governor or lieutenant-governor is a high officer of state, whose precise role and rank vary by jurisdiction, but is often the deputy or lieutenant to or ranking under a governor — a "second-in-command"...
, sections 7 and 8 of the Constitution empower the Secretary of the Puerto Rico State Department to act as Governor, should the governor be absent from Puerto Rico, become temporarily disabled or unable to discharge his/her duties.
Executive Departments
The day-to-day enforcement and administration of national laws is delegated by the Governor to 16 executive departmentsExecutive Departments of the Government of Puerto Rico
The Executive Branch of the Government of Puerto Rico comprises various Departments which provide public services to the citizens of Puerto Rico. Currently, there are 16 main departments, each with their own sub-agencies and divisions...
created by the legislative assembly to deal with specific areas of national and international affairs. The heads of the departments, chosen by the governor and approved by the Senate, form a council of advisers generally known as the Governor's Cabinet.
The Constitution provides for the creation of at least 8 departments: Departments of State, Justice, Education
Puerto Rico Department of Education
The Puerto Rico Department of Education is the department of Puerto Rico's government which manages state-operated schools in the United States commonwealth. The department is the equivalent of a state department of education and only one of two composed of a single school district...
, Health, Treasury, Labor, Agriculture, Commerce, and Public Works. However, due to the increase in population, economy, and public needs over the years, the Puerto Rico government has expanded the executive branch by establishing additional executive departments not specified in the Constitution. These additional departments are established by public law, as approved by the legislative assembly.
The title of Secretary
Secretary
A secretary, or administrative assistant, is a person whose work consists of supporting management, including executives, using a variety of project management, communication & organizational skills. These functions may be entirely carried out to assist one other employee or may be for the benefit...
is given to the heads of the executive departments, whose position is also created by statute. Cabinet member is another title primarily given by the media and the public, though it is considered unofficial. All cabinet-level Secretaries are first nominated by the Governor and are confirmed by the legislative assembly.
Each department has different divisions, agencies
Government agency
A government or state agency is a permanent or semi-permanent organization in the machinery of government that is responsible for the oversight and administration of specific functions, such as an intelligence agency. There is a notable variety of agency types...
, bureaus
Government agency
A government or state agency is a permanent or semi-permanent organization in the machinery of government that is responsible for the oversight and administration of specific functions, such as an intelligence agency. There is a notable variety of agency types...
, office
Office
An office is generally a room or other area in which people work, but may also denote a position within an organization with specific duties attached to it ; the latter is in fact an earlier usage, office as place originally referring to the location of one's duty. When used as an adjective, the...
s, and service
Public services
Public services is a term usually used to mean services provided by government to its citizens, either directly or by financing private provision of services. The term is associated with a social consensus that certain services should be available to all, regardless of income...
s, each with specific duties, in order to provide the necessary services to the general public across the island.
Public corporations
The Commonwealth of Puerto Rico has also established several public corporations in order to provide basic and public services to its citizens, including electricity, water, transportation, and education, among others. These are separate legal entities from the Commonwealth, but the government owns virtually all of these corporations’s stockStock
The capital stock of a business entity represents the original capital paid into or invested in the business by its founders. It serves as a security for the creditors of a business since it cannot be withdrawn to the detriment of the creditors...
. Each corporation is headed by an Executive Director who is appointed by the corporations’ Board of Directors
Board of directors
A board of directors is a body of elected or appointed members who jointly oversee the activities of a company or organization. Other names include board of governors, board of managers, board of regents, board of trustees, and board of visitors...
. The directors are nominated by the Governor and confirmed by the state legislative assembly.
Although public corporations are separate from the commonwealth government, who generate their income and expenses independently, several of those have faced financial troubles, and have constantly relied on so called “bail-outs” from the commonwealth to offset recurring losses and deficits. The most famous of these cases was the Puerto Rico Aqueduct and Sewer Authority (PRASA), which faced annual recurring losses in the ranges of hundreds of millions of dollars and required several bail-outs to avoid bankruptcy. While some have mistakenly referred to these bail-outs as loans, they are in fact transfers of equity because the commonwealth does not expect repayment in the future.
Public corporations have the advantage of issuing separate securities, such as bonds
Bond (finance)
In finance, a bond is a debt security, in which the authorized issuer owes the holders a debt and, depending on the terms of the bond, is obliged to pay interest to use and/or to repay the principal at a later date, termed maturity...
, in the trading market to obtain capital. This is done so that the corporations may finance public works and improvements without having to rely on the commonwealth’s credit. However, as in the case of PRASA, some public corporations have had serious financial difficulties which excluded them from the bond market, and have had to resort to commonwealth bonds to make capital additions and improvements.
Municipalities
Puerto Rico is divided into 78 divisions each municipalities headed a mayor. The municipalities also have a municipal assembly, which is in charge of overseeing the mayor’s operations, hold public meetings, and enact municipal resolutions and bylaws. Both the mayor and the municipal assemblymen are elected by the municipality’s citizens in general elections held every four years. Unlike most towns and cities in the United States., Puerto Rico does not have local or state sheriffs, sheriff duties are instead performed by the Puerto Rico Commonwealth Marshal's Office.Judicial branch
Supreme Court of Puerto Rico
The Supreme Court of Puerto Rico is the highest court of the Commonwealth of Puerto Rico, having judicial authority within Puerto Rico to interpret and decide questions of Commonwealth law. As the highest body of the judicial branch of the Puerto Rican government, it is analogous to one of the...
, the commonwealth's highest court holds its sessions in San Juan's
San Juan, Puerto Rico
San Juan , officially Municipio de la Ciudad Capital San Juan Bautista , is the capital and most populous municipality in Puerto Rico, an unincorporated territory of the United States. As of the 2010 census, it had a population of 395,326 making it the 46th-largest city under the jurisdiction of...
Miramar district.
Revenues and expenditures
Puerto Rico’s central government, which includes all three branches of government but excludes public corporations and municipalities, has an annual general budget that currently ranges from $8.5 billion to $9 billion in revenues and expenditures. The government also receives more than $4.2 billion dollars annually in subsidiesSubsidy
A subsidy is an assistance paid to a business or economic sector. Most subsidies are made by the government to producers or distributors in an industry to prevent the decline of that industry or an increase in the prices of its products or simply to encourage it to hire more labor A subsidy (also...
and federal aid from the United States. A substantial portion of this amount is earmarked for public welfare, including funding educational programs (such as Head Start), subsidized housing programs (such as (Section 8
Section 8
Section 8 or Section Eight may refer to:*Section 8 , a United States military form of discharge due to mental illness and/or problems*Section 8 , a U.S...
and public housing projects
Public housing in Puerto Rico
Public housing in Puerto Rico is a subsidized system of housing units, mostly consisting of housing projects , which are provided for low-income families in Puerto Rico...
), and a food stamp system called the Nutrition Assistance for Puerto Rico
Nutrition Assistance for Puerto Rico
Nutrition Assistance for Puerto Rico or NAP is a federal assistance nutritional program provided by the US Department of Agriculture solely to the Commonwealth of Puerto Rico, a self-governing dependency of the United States. It provides over $1.5 billion in supplemental economic resources to help...
program.
Public corporations generate approximately $6.3 billion in general revenues by charging citizens for the services they provide. The largest public corporation, the Puerto Rico Electric Power Authority (PREPA), generates almost half of those revenues alone ($3 billion). However, public corporations generate about $10.6 billion in expenses when combined, requiring substantial subsidies by the central government. In 2005, the central government provided more than $2.6 billion in subsidies, while the remaining expenditures were funded through interest and investment earnings.
When considering all three branches of government, including all public corporations and municipalities, the government of Puerto Rico’s annual expenditures can reach to more than $28 billion.
Central government revenues
The central government’s main source of revenue is income tax imposed on individual citizens and private companies, which can amount to approximately $5.5 billion. Other significant sources of revenue include excise taxes on imports, cigarettes, liquor, hotel rooms, cement, and vehicles ($2 billion); and lotteries ($870 million).Sales and Use Tax
On November 15, 2006, the government eliminated the excise tax of 6.6% on imports (taxes on cigarettes, liquor, and cars are still in effect) and substituted it for a 5.5% islandwide Sales and Use TaxSales tax
A sales tax is a tax, usually paid by the consumer at the point of purchase, itemized separately from the base price, for certain goods and services. The tax amount is usually calculated by applying a percentage rate to the taxable price of a sale....
, plus a municipal sales tax of 1.5%, for a total of 7%, in what has been known as the Puerto Rico Tax Reform. This change was partly due to the government’s growing expenditures and fiscal deficits which remained unchecked and uncorrected for several years, until several credit agencies warned public officials that all general-obligation bonds
Bond (finance)
In finance, a bond is a debt security, in which the authorized issuer owes the holders a debt and, depending on the terms of the bond, is obliged to pay interest to use and/or to repay the principal at a later date, termed maturity...
issued by the government were to be downgraded if the problem was not corrected. The situation reached a turning point when the executive branch of the government was partially shutdown, the events now known as the 2006 Puerto Rico budget crisis
2006 Puerto Rico budget crisis
The 2006 Puerto Rico budget crisis was a political, economic, and social crisis that saw much of the government of Puerto Rico shut down after it ran out of funds near the end of the 2005-2006 fiscal year. The shut down lasted for two weeks from May 1, 2006 through May 14, 2006, leaving nearly...
. Thirty-three (33) agencies were closed and 95,762 employees were sent home without pay. Following public bickering between the two main political parties, the new sales tax was approved in favor of the excise tax on imports on May 10, 2006, ending the budget crisis.
Central government expenditures
The largest types of expenditures made by the government are those related to education. In 2005 alone, the government expended more than $5 billion in public education and education-related programs, representing approx. 28% of total government expenditures (excluding public corporations). Other significant expenditures include public housingPublic housing in Puerto Rico
Public housing in Puerto Rico is a subsidized system of housing units, mostly consisting of housing projects , which are provided for low-income families in Puerto Rico...
and welfare ($3.4 billion or 19%), public safety ($2.5 billion or 14%) and public health ($2.3 billion or 13%).
Recently, several political analysts and commentators have pointed to the fact that the government of Puerto Rico is subject to an unreasonable amount of legal claims and court judgments, including some from political harassment allegations and accusations and others from health reform
Puerto Rico Health Reform
The Puerto Rico Health Reform , locally referred to simply as the Reform is a government-run program which provides medical and healthcare services to indigent and impoverished citizens of Puerto Rico by means of contracting private health insurance companies, as opposed to the traditional system of...
disputes. In 2005, these claims amounted to $11.7 billion, leading some to believe that if current trends continue, such claims may be too much to pay if they are found against the government.
In May 2007, local economists expressed serious concerns when it was revealed that the Puerto Rico public debt equaled 76% of its gross national product (GNP), making it one of the most indebted countries by percentage in the world, even more than the United States. Economists have criticized the government's fiscal policy, whose level of expenditures and indebtness has increase significantly within the past decade while the economy was grown at a much slower pace. Between 2000 and 2006 alone, Puerto Rico's GNP rose 5.37%, while its public debt's relation to GNP rose 18%. By comparison, many other Latin American countries have seen reductions in their GNP-public debt percentages during that same time period.
See also
- Nutrition Assistance for Puerto RicoNutrition Assistance for Puerto RicoNutrition Assistance for Puerto Rico or NAP is a federal assistance nutritional program provided by the US Department of Agriculture solely to the Commonwealth of Puerto Rico, a self-governing dependency of the United States. It provides over $1.5 billion in supplemental economic resources to help...
- Political party strength in Puerto RicoPolitical party strength in Puerto RicoThe following table indicates the party of elected officials in the United States insular area of Puerto Rico after 1898:*GovernorThe table also indicates the historical party composition in the territorial or Commonwealth:*Senate*House of Representatives...
- Politics of Puerto RicoPolitics of Puerto RicoThe politics of Puerto Rico take place in the framework of a republican democratic form of government that is under the jurisdiction and sovereignty of the United States of America as an organized unincorporated territory....
- Puerto Rico Federal Affairs AdministrationPuerto Rico Federal Affairs AdministrationThe Puerto Rico Federal Affairs Administration represents the Government of Puerto Rico before federal, state, and local governments, promotes the Governor of Puerto Rico's economic and public policy initiatives to achieve a better quality of life for the four million U.S...
- Puerto Rico Health ReformPuerto Rico Health ReformThe Puerto Rico Health Reform , locally referred to simply as the Reform is a government-run program which provides medical and healthcare services to indigent and impoverished citizens of Puerto Rico by means of contracting private health insurance companies, as opposed to the traditional system of...
External links
- gobierno.pr - Government of Puerto Rico's Executive Branch official site, in SpanishSpanish languageSpanish , also known as Castilian , is a Romance language in the Ibero-Romance group that evolved from several languages and dialects in central-northern Iberia around the 9th century and gradually spread with the expansion of the Kingdom of Castile into central and southern Iberia during the...
. - Organizational chart of the Government of Puerto Rico's Executive Branch (Spanish)
- oslpr.org - Legislative Assembly of Puerto Rico official site, accessible in SpanishSpanish languageSpanish , also known as Castilian , is a Romance language in the Ibero-Romance group that evolved from several languages and dialects in central-northern Iberia around the 9th century and gradually spread with the expansion of the Kingdom of Castile into central and southern Iberia during the...
and EnglishEnglish languageEnglish is a West Germanic language that arose in the Anglo-Saxon kingdoms of England and spread into what was to become south-east Scotland under the influence of the Anglian medieval kingdom of Northumbria...
. - tribunalpr.org - Supreme Court of Puerto Rico official site, in SpanishSpanish languageSpanish , also known as Castilian , is a Romance language in the Ibero-Romance group that evolved from several languages and dialects in central-northern Iberia around the 9th century and gradually spread with the expansion of the Kingdom of Castile into central and southern Iberia during the...
.