Responding to a demand from Republican Congressman Paul Gosar (Arizona), the Financial Oversight and Management Board (FOMB) said it is evaluating municipal taxes on construction projects in Puerto Rico, beyond its earlier order halting enforcement of a 2015 law that allows such taxes on federally funded works. In a Tuesday letter, FOMB executive director Robert Mujica said the board agrees that imposing higher excise taxes on disaster-recovery projects than on comparable private projects is "misguided public policy," and that it has repeatedly told Puerto Rico's government and municipalities that such higher rates on government-funded projects are counterproductive, undermine efforts to secure federal funds, discourage investment, and hinder reconstruction essential to long-term economic recovery.
Gosar, who chairs the Natural Resources Committee's Oversight and Investigations Subcommittee and is among its most conservative members, had asked on August 18 that the FOMB report by September 15 whether it plans to challenge the municipal tax in federal court, disclose total funds municipalities collected from reconstruction-related projects, provide audits or financial data on those collections, and clarify its stance on retroactive taxes on federal contractors for essential post-Hurricane Irma and Maria (2017) services.