Marches, picket lines and other demonstrations are shaking Puerto Rico as the colonial administration closed down government agencies and schools, ironically enough, on May 1 — International Workers Day — in response to the island nation’s budget crisis. Up to 100,000 people, over 6 percent of the workforce, are losing their public sector jobs in this country of about 4 million.
Unemployment in Puerto Rico already hovers in the teens.
While the government of Gov. Anibal Acevedo Vila and other pro-business sectors are pushing for an additional sales tax to resolve a revenue shortfall, other forces are calling for more taxes on big, mostly U.S., corporations.
How best to find a solution to the crisis, one that benefits working people, has been a source of controversy among some public sector workers. This was evident in the response to an April 19 demonstration initiated by the Association of Commonwealth Employees (AEELA), which called for a 7 percent sales tax. The call for a sales tax prompted several unions and pro-independence groups to withdraw their support for the action.
Although the demands of AEELA echoed those of the government, when the march took place Acevedo Vila deployed police in riot gear to prevent the workers from reaching the Capitol building in San Juan.
Victor Villalba, president of the Central Puertorriqueña de Trabajadores (CPT), a federation of 24 non-AFL-CIO unions in Puerto Rico, issued a statement that said neither the CPT nor the United Coordinating Center of State Workers (CUTE) would support “any sales tax which will aggravate the economic situation of Puerto Rican workers.”
Hector Pesquera, spokesman for the Hostos National Independence Movement (MINH), said it was “unheard of that workers would march in support of imposing a sales tax on themselves as a way to solve a crisis” caused by succeeding colonial administrations.
The MINH called for “not choosing between bad and worse,” referring to a recently passed sales tax of 4 percent and the newly proposed 7 percent figure. The MINH called on the government to instead tax “the $30 billion in profits” that flow from Puerto Rico to the U.S. each year.
Another protest, this one called by several radio and television personalities for April 28 in San Juan, drew about 50,000 people. Mass support for the Puerto Rican Independence Party’s (PIP) proposal to tax corporations rather than workers was clearly evident.
A bill introduced in the Puerto Rican Senate by PIP Sen. Maria Lourdes Santiago would levy an additional 5 percent tax on corporations with profits of $1 million or more during 2005. Santiago said, “This would give the Department of Revenue the necessary flow of funds so that the affected governmental agencies can have solvency for their operations and continue to serve the people of Puerto Rico.”
The additional tax would affect mostly U.S.-based transnational corporations doing business on the island. Fifty-six of the top Fortune 100 corporations have operations in Puerto Rico.
Pesquera of the MINH accused Gov. Acevedo Vila, leader of the autonomist Popular Democratic Party, of giving in to the pro-statehood New Progressive Party and bondholders by proposing the 7 percent sales tax.
He wrote, “The Commonwealth government has a public debt of $40 billion to bondholders. The debt service on this public debt is the highest in the whole [Western] Hemisphere.” He said this means the government “pays $300 million to the bondholders monthly,” or approximately $3.6 billion each year.
Pesquera called for a moratorium on the payment of debt service and using the savings to fund government services that benefit working people, which account for roughly 15 percent of the budget.
“Every 15-day pay period, every month, workers face the dilemma of what to pay now and what to pay later,” he said, saying this time the bondholders — large financial institutions — should bear the brunt of the fiscal crisis.