The Solution to Economic Abuse in Puerto Rico

The Current Crisis in Puerto Rico

Through the years, Puerto Ricans have been living in an era of Economic, Social, and Political Crisis on the island. Most of the society does not pay attention to these situations or to the problems presented. All three types of crisis connect at one point. Through my proposal, I want to explain and expose the cause and effect of two situations that Puerto Rico has been going through: the increase in the salaries of different city mayors, and the abuse of those who “need” financial assistance.

The Solution to Economic Abuse in Puerto Rico

On February 23, 2009, the Autonomous Municipalities Act was created to ensure more control over the different mayors’ decisions. It was set out in Article 3.012 of the Act, the concerns dealing with the authorization of increases in salaries of mayors. In this part of the Act, Hernández (2009) states the following:

“A mayor's salary will be established depending on the time of its term and the population of his municipality. A mayor, in his/her first term, can earn a salary of three thousand ($ 3,000.00) to five thousand dollars ($ 5,000.00)… In a municipality with a population over one hundred thousand (100,000) occupants, one Mayor re-elected may earn a salary of five thousand ($ 5,000.00) to nine thousand dollars ($ 9,000.00).”

A serious problem with this Act is that it provides too much freedom or autonomy to those municipality leaders who do not have the capacity to attend in a correct manner to the financial needs. For example, the mayor of Villalba was investigated for using public funds to finance a personal trip to New Jersey. Another example is the increase in the salary of the mayor of Rio Grande, Eduardo Rivera Correa, from $3,900 to $7,500 because he thought that the salary he earned initially was not enough for his living expenses. According to Fonseca (2013), “the ones who can lower the salary of the mayors are the legislators, and they will not want to confront the mayor of the municipalities. But, how can these mayors say that their salary is not enough for their cost of living when the income per capita of any citizen is $1,600 to no more than $3,000 monthly.” He does have a point. Most mayors do not have the expenses that most of the citizens have. If the money they receive was used to better the status of their municipality, then it would be understandable that their income would be increased, but the facts do not prove that. In the case of the mayor of Rio Grande, it was found that the municipality had a $2.2 million deficit in 2010-11, following the increase in his income.

The Issue of Financial Assistance Abuse

The mayors are one problem, but society is another. Puerto Rico provides financial assistance for those who need it. But the question is, do they truly need that help? One of the most well-known forms of aid that the government offers is the Nutritional Assistance Program, also known as PAN, which is a family credit card that receives a monthly payment where part of that money can only be used for grocery shopping. Out of 3.7 million people that compose the population, 1.5 million receive this help. Those 640,000 families receive a payment of $150 up to $650 monthly, where 25% of that money can be taken as cash for other expenses.

Most of the people that receive this financial assistance live in public housing or, as we Puerto Ricans call them, the residenciales. In 2009, Project 894 was presented, which established the “Special Law for Justified Tariffs for Utilities for Public Housing” that outlined how the different funds would be used for the maintenance of the residential. The funds provided $70,438,000, where $68,728,000 came from federal funds, and the other $1,710,000 came from loans and bonds. Most of that money could be used for the improvement of other areas like schools, roads, and community programs. Those people, besides receiving financial assistance, live in public housing with fixed monthly payments for water and electricity. Their monthly payments for water are only $19.71, and for electricity just $30, which most of them do not pay because they install illegal connections, known as un pillo de luz y agua, which gives them the “privilege” of having no expenses.

The Impact on Future Generations

All of these problems have an effect on future society, especially on college students and those who soon will enter college. Although most college students receive financial aid like scholarships and grants, many of them try to find a job during their first four years or their bachelor years to start saving money for their master's and doctor’s degrees. There is the problem. Society today is suffering from a crisis of unemployment, where statistics show that 30% of the population aged 15 to 24 years old are unemployed because most jobs today have high requirements that most of them do not have, like having a bachelor’s degree in the specific branch the job requires.

Proposed Solutions

The solutions I want to present are simple but require more effort from those who control the salaries of the mayors, which would be the legislature, and those who control financial assistance, which would be the Family Department. The solution I propose is to not approve a request without first conducting a background investigation of the individual. Investigate the cause or reasons the person wants that money, what that person wants it for, how they will use it, etc. If the background investigation presents valid reasons, then approve the request, but do not stop there. Keep a watch on that person to see if he/she is truly worthy of maintaining that support or financial assistance. If after a month or two the person shows misuse of the money, then cancel that support and give it to somebody else. But stop wasting money on things, in this case, people that do not deserve it because they do not know how to properly use the money they are receiving.

Conclusion

Money is not something to give away, especially when the country is suffering an economic crisis. The economic abuse that people, from the poor to those in power, have over the money that the government does not have could be considered the biggest part of the base of the economic problem in Puerto Rico. The government should take better control over the money that is left or that they receive and learn how to handle it to benefit the people and the country’s status. But society needs to learn that they cannot abuse the money they receive because they have the “privilege” of receiving that financial aid when they do not truly need it. There are families out there who NEED that help, but they are not among the poor; they are instead hidden among the middle class of society.

References

• Hernández, A. (2009). Autonomous Municipalities Act, Article 3.012.
• Fonseca, J. (2013). The financial challenges of Puerto Rican mayors. El Nuevo Día.