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Este informe no está disponible en español. CARIBBEAN BUSINESS The Governor’s Forked Tongue By Carlos Romero Barcelo May 6, 2005 The majority of the articles, stories, and columns that appear in the press and a majority of the comments and stories in television and radio news express great concern about what is going to happen to our economy if the governor’s budget isn’t approved by the Legislature. One must wonder if those newscasters, news directors, panelists, and commentators are very naive, politically biased, or just plain cynical. Any intelligent and objective person living in Puerto Rico has to realize that the governor’s budget is unacceptable and contrary, in many areas, to the program voted for by the people, that is, the New Progressive Party (NPP) platform. I have no doubt the representatives and senators will come up with a budget that is in line with the NPP platform. It will be Gov. Acevedo Vilá who probably will veto the budget submitted to him. He has clearly shown he has no desire or inclination whatsoever of "sharing" government as he alleges. As I have said on numerous occasions, he doesn’t want to share his power. He only wants to share the Legislature’s power. He consistently has refused to consult with NPP legislators on any appointment to the Cabinet or the executive branch. All of his appointments, with the exception of Police Superintendent Pedro Toledo, have been members of his political party. Most of them participated actively in his campaign. When he refers to them, he claims he didn’t appoint them because they were populares, but because they were qualified. He is a pathological liar and, unfortunately, most of the press is playing his game. They join in his criticism of the NPP in saying the opposition to his appointments is motivated by partisan interests. In other words, when he acts based on partisan motivations, he is being objective and patriotic and whoever opposes his nominations or decisions is politically motivated. If a budget isn’t signed into law by the end of June, it won’t be because the NPP failed to pass a budget; it will be because Acevedo Vilá has been lying all along when he says he wants to "share" all government decisions with the NPP leadership. Not only is Acevedo Vilá trying to put the blame of his inaction regarding the budget on the Legislature’s shoulders, but he also wants to put the blame of our sluggish economy and the semiparalysis of government on the shoulders of the NPP legislators. The reason why we still don’t have a budget is Acevedo Vilá’s own fault. It is his fault because he failed to ask the speaker of the House to join with the president of the Senate and appoint an informal joint committee on the budget, where the governor’s budget director could participate in drafting a budget. That is, if he really meant what he said about "shared" government. But, obviously, he didn’t. On the contrary, he sent a budget, which he prepared with his own followers, establishing "his" priorities and not "our" priorities. He sent a budget with an $800 million increase. This is unacceptable considering the fiscal situation in which the Calderón administration left the Puerto Rico Treasury. That is, with a $2 billion deficit. He not only established his own partisan priorities and irresponsibly increased the proposed budget by $800 million, but he also proposed an increase in expenditures, public works, and infrastructure for the 36 municipalities controlled by populares, not in the 42 municipalities controlled by the NPP. The NPP not only has more municipalities, but the populations of the NPP municipalities are much larger than those of the municipalities controlled by the populares. Who, then, is the one establishing priorities pursuant to partisan political motivations? How can the NPP-controlled Legislature approve the irresponsible and politically skewed budget that Acevedo Vilá sent to the Legislature? How can it accept an increase of $800 million when there isn’t enough revenue to cover the $2 billion deficit? No, the budget Acevedo Vilá sent can’t be approved. It would be an irresponsible act by the Legislature. Not only is Acevedo Vilá’s proposed budget an irresponsible act but, from a fiscal and financial point of view, the news of this budget has probably served as an additional ingredient in discrediting Puerto Rico in the financial and investment world, where our credit has been severely degraded. How much this has hurt our financial and banking enterprises is hard to tell. However, there can be no doubt that his budget, with the $800 million increase, and his request for an additional 5% income tax on bank revenue before deducting expenses, have had an ill effect on the value of banks’ shares. The Calderón administration, which Acevedo so strongly defended during its four years, not only discredited Puerto Rico financially, but also caused great harm with its anti-American attitudes and expressions, particularly in the way it handled the Vieques issue. Instead of trying to undo the great damage the Calderón administration did to Puerto Rico, our reputation, and our image, Acevedo Vilá seems intent on causing more damage. The credibility of the governor is very important in the financial world. A nation, a state, or a territory whose president or governor has little or no credibility will suffer serious damage as a result of a lack of trust. In the handling of the Status Joint Resolution, the governor destroyed his credibility beyond repair. Publicly, Acevedo Vilá continues to contradict himself systematically. Either because he has no well-thought-out plan to improve our economy, or because he just can’t help lying and trying to fool people. Why do I say this? He keeps making contradictory statements, of which he must be aware. Yet, he is so accustomed to lying and getting away with it that he just keeps on doing it. His latest contradiction is his public statement about the proposed sales tax. During the 2004 campaign, he accused former Gov. Pedro Rosselló of wanting to tax the poor by proposing a sales tax in lieu of our hidden and costly excise taxes. He never told the people the truth about the hidden excise taxes. As a matter of fact, when former Gov. Rafael Hernández Colón first signed into law the 6.6% excise tax on all goods, I criticized him very strongly because he failed to exempt basic items such as books, medicine, food, Pampers, toothbrushes, toothpaste, etc. In the 1976 electoral campaign, I promised to eliminate the excise taxes on all those basic items; when I took office, I eliminated the excise taxes on those goods. Acevedo has proposed imposing the 6.6% excise tax on those basic items, again. The NPP opposes such an inclusion and has promised not to allow the excise tax on those basic items. The NPP further proposes to eliminate all excise taxes and adopt a sales-tax system that excludes all basic items, to protect low-income families and individuals. In his customary hypocritical and misleading fashion, Acevedo now says he is willing to consider a sales-tax system, but states the overall tax system must reduce income taxes and particularly reduce taxes for low-income families and individuals. How can you impose excise taxes on now-exempt basic goods and protect the low-income families from paying more taxes? How can you reduce income taxes and at the same time eliminate or reduce the $2 billion deficit? The only way would be to do what I did in 1978, reduce tax exemptions for multimillion-dollar manufacturing firms, such as the pharmaceutical plants. However, Acevedo Vilá won’t do that for purely partisan political reasons. He would rather protect multimillion-dollar manufacturers instead of low-income families. It does seem Acevedo Vilá speaks with a forked tongue. Carlos Romero Barceló is a two-term former governor of Puerto Rico (1977-84), a two-term former resident commissioner (1993-2000), and a two-term former mayor of San Juan (1969-78). He was president of the New Progressive Party for 11 years. This Caribbean Business article appears courtesy of Casiano Communications. or
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