November 26, 2020

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The culture of waste threatens fiscal health




The debt that keeps Puerto Rico in bankruptcy is largely the result of a series of big and small expenses on questionable or unnecessary contracts and purchases. This indiscriminate use of public funds is a systemic evil that undermines the services to citizens and public institutions.

In recent days, we have seen new examples of how the problem repeats. On one hand, the State Elections Commission (CEE, Spanish acronym) hired a person to send messages through social media for $24,000 per year. Then, the purchase of a vehicle for more than $67,000 with Isabela municipal government funds. These figures would seem “small” compared to the overall budget. But no expense is small when the island fails to provide quality services and meet the challenges of reconstruction.

Sound administration is a daily practice. Every official should keep this in mind when making decisions since public servants in all branches of government have a duty to protect the public interest. However, as in other cases, officials who signed those contracts try to justify actions that are not in line with the reality of the island.

In the case of the CEE, President Juan Dávila Rivera argued that hiring a person to manage his personal account, separate from the internal communications office, was necessary for him to communicate matters on which there is no consensus among the commissioners. That contract became public when the account manager used the CEE platform to share a message from an agency chief with whom he also has a $30,000 contract. Meanwhile, the CEE requested assistance to repair damages to the facilities and comply with electoral duties.

In Isabela, Mayor Carlos Delgado Altieri bought a high-end vehicle when the island was just recovering from the disaster caused by Hurricane María. Delgado Altieri, now candidate for governor, argued that the municipality has a surplus and that the vehicle is high-performance.

These transactions so far from public interest remind us of the purchase of COVID-19 rapid testing kits to political cronies with no experience in this field. A transaction that is now being investigated by authorities.

In contrast, over the past few weeks, we have seen thousands of citizens losing their day waiting for their unemployment insurance. Many of these became unemployed due to the pandemic, earned the federal minimum wage – $7.25, some have more than one job to reach the island’s average wage, which is around $24,000.

In Puerto Rico, the median income of a family with children under 18 was $19,257 by 2017. Recent questionable contracts in municipalities and central government agencies show that priorities are different between those who manage public funds and the people who suffer from a lack of attention to their needs.

Puerto Rico is bankrupt. Even with billions of dollars allocated to address the three emergencies of the last few years, most Puerto Ricans face precarious conditions in their homes, lack of services, or deterioration of public infrastructure. Solving this problem begins by making these efforts a priority and using funds efficiently.

Puerto Rico has yet to straighten out its finances to regain the confidence of the people, the federal government, and capital markets. To that goal, it is necessary to generate the capacity leading to make sound investment decisions and respect for public resources. Fiscal health demands to overcome the culture of waste.



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