Manolo, it seems that with municipal reform, we finally found a subject in which our views are totally different. You propose we should regionalize municipalities and create eight districts with a more efficient cost structure. Meanwhile, my proposal is to make each of the 78 municipalities more important in our government system, which means giving them additional responsibilities and a larger budget.
Don’t get me wrong. In their current state, municipalities are a total waste of resources, whose only real purpose is to operate as the main political parties’ workhorses. But that can change. If reformed correctly, municipalities could become the backbone of Puerto Rico’s government.
Efficient countries tend to have either a large centralized government that controls everything from the top or multiple smaller decentralized governments that operate semi-autonomously. The problem in Puerto Rico is that for decades, we have operated with both government systems at the same time.
On the one hand, we have a central government that requires some of the highest corporate, sales and income taxes in the world to sustain its hundreds of thousands of employees. While on the other hand, we have 78 municipalities, with annual budgets that easily surpass a billion dollars in order to maintain their unnecessary infrastructure spending. Meanwhile, the island’s education system is broken, our healthcare system is scarily underfunded and crime statistics are through the roof.
This dual system is simply not sustainable any longer. The first step for reforming our government is deciding if we want a large centralized government or a decentralized one.
In theory, centralized governments are more efficient, as they eliminate the necessity of having multiple human resources, finance and IT offices. But even though they are less efficient in terms of spending, decentralized governments tend to provide better services because they are closer to the people and understand their needs better.
The problem with both systems is that they depend on having good leadership. Under the wrong leadership, a centralized system can be full of waste and excess, while a decentralized system can be completely disconnected from the people’s needs.
Our recent history lets us know that in Puerto Rico’s case, we can expect our leaders, on average, to be sub-par. Therefore, in my view, we should choose a decentralized system as it spreads the power of government officials and thus prevents the whole country from being affected by just one leader.
The math is pretty simple; currently, all of Puerto Rico is experiencing the pain of having a bankrupt central government. But according to the organization Abre Puerto Rico, there are 17 municipalities on the island that have a good financial position. If our municipalities were our main source of government, Puerto Ricans would have 17 well-run places to live, where they wouldn’t have to worry about taxes continuously going up and services getting worse.
Edgardo, while participating as a panelist in the news show, “Jugando Pelota Dura” a few months ago, I discussed with legislators Pichy Torres Zamora (New Progressive Party) and Tatito Hernández (Popular Democratic Party), Puerto Rico’s inventory tax, which has been proven to be so dangerous, especially in hurricane season. When I asked them how they planned to eliminate this tax, they both gave the same answer almost simultaneously. They said it’s going to get solved and we are currently analyzing other sources of income that can be tapped to replace the lost revenue form eliminating this tax.
Following their answer, I couldn’t help myself and had to ask them if there is something in the seats they hold that prevents them and all the other legislators from eliminating taxes and simply reducing expenses to cover the lost income, instead of creating new forms of taxation.
We all know the answer to my question. Our deranged legislators are once again forcing the people to pay for the government’s inability to manage its resources. The new municipal reform is a 1,200-page document that fixes nothing; it simply changes the bedsheets on the dying patient, but the treatment stays the same.
For example, instead of eliminating the inventory tax and reducing municipal expenses, they are now seeking to partially reform the property tax in order to replace the lost revenue. But even this property tax reform is broken. There are thousands of property owners across the island that don’t pay taxes because the properties aren’t registered in the system and thousands more that have outstanding debts that total over $2.5 billion. Instead of fixing these broken parts of the system, their solution is to raise taxes on those of us who already pay our fair share.
Instead of implementing this “reform” and adding taxes to the telecommunications industry, they should be analyzing how to create efficiencies by making eight municipal regions that eliminate the need for 78 municipal assemblies, human resource departments and so many other unnecessary offices.
This reform is designed to help the president of the Senate and his senators maintain their current positions, not to help the country. It would be great to see the mayors make the right choice and demand a real municipal reform. The governor also has an opportunity to take a stand and demand real change.
But Edgardo, it’s easier to stand back and wait for federal funds than it is to take action and make the necessary changes. As long as we have our current type of leaders, it will be very hard, if not impossible to get Puerto Rico going in the right direction.