Tags: puerto rico | debt | us | mainland | hardship

Puerto Ricans Fleeing Debt-Mired Island for US Mainland

Image: Puerto Ricans Fleeing Debt-Mired Island for US Mainland
(Sean Pavone/Dreamstime)

By    |   Wednesday, 08 Jul 2015 11:43 AM

As economic hardships persist in Puerto Rico, more residents are opting to relocate to the U.S. mainland.

The Puerto Rico population has dropped from 4 million in 2009 to 3.6 million now, The Miami Herald is reporting.

Puerto Rico Gov. Alejandro García Padilla said in June that the $72 billion debt the island is facing is not payable.

In an attempt to tackle the debt problem, the commonwealth recently raised the sales tax to 11.5 percent, which is higher than that of any U.S. state.

On the same day that the new sales tax was enacted, Puerto Rican resident Yessenia Puente, 35, was packing up to move to Orlando.

"I've been thinking about it for a while because I've seen how things are deteriorating," Puente told the Herald. "But with everything happening now, I decided it's time to go. The system doesn’t work here."

The moving company that was helping Puente pack up her belongings told the Herald that she and her three children are the 1,465th family it has helped move to the United States since January.

Puente said that one of the reasons she decided to make the shift is because "the cost of living is too high."

"The government gives money to the people who don’t work, to those doing drugs, living on welfare," she said. "I’m not willing to do that anymore."

Residents are also dealing with water rationing, as the island is in a drought, and the Herald is reporting that power outages may be next, due to a debt the government owes the electric company. This is in addition to a 12.4 percent unemployment rate.

Padilla and his team are meeting with a variety of people, including stakeholders, lawmakers, economists and others to come with a plan to tackle the financial problems Puerto Rico is facing. They have until Aug. 30 to propose one.

But some of the ideas being floated, such as lowering the minimum wage and creating mandatory furloughs, could result in making things worse. And with more and more people opting to leave, the island's tax base is shrinking.

Some lawmakers are working to give Puerto Rico the option to file for bankruptcy, as the White House has said that it will not consider a federal bailout.

A Chapter 9 bankruptcy for Puerto Rico "would allow Puerto Rican municipalities to do what the thousands of municipalities in the upper 50 states can already do — declare bankruptcy. Doing so would allow for a structured wind-down of this crisis under the administration of bankruptcy courts," says Ryan Ellis, tax policy director from Americans for Tax Reform.

"Clearly, that's a far better alternative than another bailout coming from Washington," Ellis said.

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As economic hardships persist in Puerto Rico, more residents are opting to relocate to the U.S. mainland.
puerto rico, debt, us, mainland, hardship
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2015-43-08
Wednesday, 08 Jul 2015 11:43 AM
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