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Latino Daily News

Saturday December 14, 2013

Northern Puerto Rican City Says It Is Running Out of Money

Northern Puerto Rican City Says It Is Running Out of Money

Photo: Arecibo, Puerto Rico

Click Here to Enlarge Photo

The government of the Puerto Rican city of Arecibo, site of the biggest radio telescope in the world, has just realized it has only enough money to pay its 800 employees for one more month.

“We’ve asked for help from the governor,” Mayor Carlos Molina said Friday.

The coastal municipality at some 80 kilometers (50 miles) west of San Juan estimates a budget deficit of $17 million for the current fiscal year and is $60 million in debt.

“We hope we don’t have to dismiss any local government workers,” the mayor told reporters Friday.

There is nothing new about the economic problems of Arecibo, a city of some 100,000 residents known for its beautiful beaches, which for some time has been studying what to do to trim its deficit, like building an incinerator that could earn a serious money for the municipal coffers.

For now, Molina is asking the island’s government to pay off as soon as possible the $1.5 million it owes the municipality from a lawsuit the latter won against the state company in charge of highways.

Arecibo was long one of Puerto Rico’s more prosperous municipalities, thanks to the launch 50 years ago of the massive radio telescope complex and the subsequent arrival of large pharmaceutical companies seeking favorable tax conditions.

However, a combination of expiring drug patents and an end to U.S. federal tax breaks for companies that locate in Puerto Rico led to a shrinking of the island’s pharmaceutical sector.

Arecibo and the rest of the island face a very difficult situation after an accumulated seven years of recession and the setback signified by rating agencies’ threat to downgrade Puerto Rican public debt to junk status.

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