Robert Mujica, executive director of the Fiscal Supervision Board (JSF), warned that 22 municipalities in Puerto Rico are imposing higher construction tax rates on federally funded projects than on private works. This practice could divert money meant for recovery and risk the reimbursement of federal funds. Mujica noted that 15 municipalities apply a 10% tax rate to government-funded projects, in some cases more than double the rate applied to comparable private works.
The increase in these tax rates accelerated after the massive influx of federal funds following Hurricane Maria. During a public meeting, the JSF and Governor Jenniffer González presented a synchronized view on the country's fiscal state, highlighting significant advances in revenue, employment, permits, and administrative modernization, but also recognizing deep structural flaws in education, Medicaid, pensions, energy, and public contracting that threaten Puerto Rico's fiscal stability. The governor reported that the General Fund's revenue for fiscal year 2026 closed at $13.9 billion, a 6.7% increase over the projected amount.
Mujica cautioned that certifying a balanced budget is only the first step and that living within it is another matter, citing the Education Department's lack of an operational plan aligned with its budget despite losing federal funds and a 40% decline in enrollment since 2016.