Puerto Rico legislature approves $554 million tax rebate

The Puerto Rico legislature approved a $554 million one-time rebate to Puerto Rico taxpayers.

Gov. Jenniffer Gonz?lez Col?n expressed her support for the measure after the Monday vote and said she would sign it Tuesday.

Puerto Rico's general fund this year is $13.1 billion.

Surpluses from fiscal years 2022 to 2024 will fund the rebate.

The Puerto Rico Oversight Board said it didn't have a position on the bill yet, but Gonz?lez Col?n suggested the Oversight Board opposes the giveback.

The governor posted a video to Facebook where she asked, "Why am I excited? Because the legislative assembly sided with you, not with the board of fiscal oversight. Unfortunately, the board defends its interests but not the interests of the people of Puerto Rico."

The legislature is also working on a bill to reform the tax system, something the Oversight Board has repeatedly said it supports.

"The Oversight Board has not yet received the fiscal impact analysis of either the tax bills or the newly proposed refund bill," said its Press Secretary Sylvette Santiago. "The Oversight Board is therefore unable to immediately assess either the government's source of funding for the rebate bill, nor the effect on Puerto Rico's economy. It is our understanding that the government did not provide [the] legislative assembly with such fiscal analysis of the cost and impact of the tax bills or the refund bills either."

Santiago said the board expected to meet with Gonz?lez Col?n to assess the proposal's fiscal impact and to reach an agreement on tax relief.

Gonz?lez Col?n introduced a separate $550 million tax reform plan in early January that would reduce rates for those earning less than $90,000 a year and raise the deduction for dependents.

The board's response to that proposal was: "While the bill does reduce the tax rates for many taxpayers, it does not constitute a broad, holistic, or integrated tax reform that would position Puerto Rico for long-term economic growth, as the government and the Oversight Board consistently discussed."

The board said in that statement it expects current fiscal year general fund receipts to decline from last year.

Puerto Rico's general obligation bonds are paid from its general fund.

Ivette Santamaria contributed to this report.