The Solution to Economic Abuse in Puerto Rico

Through the years, Puerto Ricans have been living the era of Economic, Social, and Political Crisis in the island. Most of the society does not pay attention to those situations or to the problems presented. All the 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 and is going through, and those are the increase of the salaries of different city mayors, and the abuse of those who “need” financial assistance.

The Impact of Autonomous Municipalities Act

On February 23, 2009, the Autonomous Municipalities Act was created in order to ensure more control over the different mayors’ decision. 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 of attending in a correct manner the financial needs. A couple of examples to support this statement are the case of the mayor from Villalba, who was conducted in an investigation for using the money to go on a trip to New Jersey; 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 at first 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 of $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 $2.2 million dollars in deficit in 2010-11, after the increase of his income.

Financial Assistance: A Double-Edged Sword

The mayors are one problem, but the society is another. Puerto Rico provides financial assistance for those who needed. But the question would be, do they truly need that help? One of the most famous helps that the government gives 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, the Project 894 was presented which established the “Special Law for Justified Tariffs for Utilities for Public Housing” that presented the ways the different funds would be used for the maintenance of the residential. The funds provided $70,438,000 were $68,728,000 came from federal funds, and the other $1,710,000 came from loans and bonds. Most of that money can be used for the improvement of other difficulties like for schools, roads, community programs, etc. Those people, besides receiving the financial assistance they get, they live in public housing with fixed monthly payments in two appeals: water and electricity. Their monthly payments on water is only $19.71, and on electricity just $30, which in reality most of them do not pay because they put a trap o better known as un pillo de luz y agua which gives them the “privilege” of having no expenses.

The Consequences on Future Generations

All of these problems stated have an effect on the future society, especially on college students and those who soon are going to go into college. Although most college students receive financial aid like scholarships and grants; most try to find a job during their first four years or their bachelor years so they can start saving money for their masters and doctor’s degree. There is a problem. Society today is suffering a crisis of unemployment where facts state that 30%of populations aged 15 to 24 years old are unemployed because most jobs presented today have high requirements that most do not have such as having a bachelor’s degree in specific branches required by employers.

Proposed Solutions for Financial Management

The solutions I want to present are simple but require more effort from those who control salaries: legislators concerning mayors' wages; and officials controlling financial assistance under Family Department jurisdiction.The solution I provide is straightforward—do not approve requests without first conducting background investigations into applicants’ circumstances concerning monetary needs—the reasons behind seeking help—including potential intended uses.As valid justifications emerge during investigations then approvals should follow—but monitoring must continue post-approval.If after one or two months misuse becomes evident then cut off support—reallocate funds towards individuals genuinely deserving aid thus avoiding further waste stemming from irresponsible spending habits observed among certain recipients.

The Urgency for Economic Responsibility

Money is not something given away especially when countries face economic crises.Misuse ranging between poor citizens up towards influential figures within power structures showcases significant roots fueling ongoing challenges throughout Puerto Rico’s economy.Government bodies must enforce stricter oversight regarding both available resources along with allocations being made ensuring beneficial outcomes reflect positively upon communities affected by instability.Yet society equally shares responsibility understanding abuses exist amongst those receiving supports—they must recognize privileges granted while real hardships experienced remain unnoticed amidst middle-class individuals seeking assistance.