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On Wednesday, Bayamón Mayor Ramón Luis Rivera Cruz expressed his belief that the bill currently under consideration in the Legislative Assembly, aimed at freezing the inventory tax for a five-year period while alternatives for the payment are determined, will gain approval.
“This issue is being tackled by the [Popular Democratic Party] Mayors Association and the [New Progressive Party] Mayors Federation, along with the fiscal control [Financial Oversight and Management] board,” Rivera Cruz stated during a press briefing. “I attended the most recent meeting at their request, where we came to an agreement to freeze the tax for five years. We will advocate for the bill in the Legislature to establish the necessary mechanisms for a transition during this timeframe, as it cannot be implemented instantly without creating a significant gap.”
“Many people might not realize that part of this revenue, specifically one percent, is allocated for state bond payments and another portion goes to municipal bond payments,” the mayor explained. “This funding is already earmarked. A replacement source for that revenue must be identified. Consequently, any proposed bill will undergo scrutiny and could be halted by the fiscal control board until a thorough evaluation is conducted.”
Rivera Cruz dismissed the idea that municipalities could eradicate the inventory tax through a local ordinance.
“A resolution or municipal ordinance cannot supersede a law,” he stated. “There is a consensus across Puerto Rico that action is necessary, which is why dialogues with the [oversight] board took place, and this transitional framework will be established to work towards a reasonable agreement. Just as the fiscal control board indicated a decade ago that the equalization fund would be abolished with a transitional phase involved. This matter is straightforward; it is a legal issue. The law … an ordinance cannot override existing law. Ordinances can only modify aspects, but they cannot alter the law itself.”
Governor Pedro Pierluisi Urrutia has not excluded the possibility of convening an extraordinary session following the November elections to discuss the inventory tax freeze or any other matters needing a consensus for approval.
