Chamber Of Commerce Calls On Government To Trim Spending
By Ken Oliver-Mendez
March 26, 2002
The Chamber of Commerces Board of Directors is taking the Commonwealth government to task for not reducing the rate of growth in expenditures presented in its fiscal year (FY) 2003 budget.
Chamber President Jose Joaquin Villamil told CARIBBEAN BUSINESS that the institutions board has taken the position that the governments current fiscal movesincluding steep proposed increases in excise taxes on consumer products such as alcoholic beverages and cigarettesare not as much aimed at covering an estimated $596 million budget deficit for FY 2003, but rather for financing additional government expenditures in the proposed budget.
"The very least the government needs to do right now is hold down its proposed spending increases to within the rate of inflation, which is between three and four percent," Villamil said. "As it stands right now, the government is proposing a 5% spending increase for the General Fund, and a 6.3% increase in the Consolidated Budget."
Villamil said if the government is able to demonstrate to the private sector that it is willing to hold down spending increases to lower levels, then private sector leaders would be more willing to help the government come up with more reasonable revenue-raising alternatives.
In conversations with government officials, Villamil says hes trying to impress upon them that if the government doesnt budge on its current proposed spending and fiscal moves, it could face an "all-out, drag-down fight with the private sector, which is the worst thing that could happen in Puerto Rico at this point."
Villamil expects that the issues could come to a headand will certainly be the principal focus of attentionat next weeks Business Forum with the Government, an annual event sponsored by the Chamber of Commerce. Gov. Sila Calderon and top government agency heads are expected to attend the event, scheduled to take place April 2.
The Chamber of Commerce president reiterated that the Commonwealths current fiscal juncture makes it more necessary than ever to pursue a serious effort to reform the governments tax system, including the development of consumption-based tax alternatives such as a sales or value-added taxes.
This Caribbean Business article appears courtesy of Casiano Communications.