Gabriel Hernández, president of the Federación de Alcaldes (Federation of Mayors), said on Monday that the group plans to request a meeting with the FEMA region with jurisdiction over Puerto Rico. The aim is to explain how municipal construction excise taxes (arbitrios de construcción) work and dispel doubts about the legality of collecting the tax on the island.
The meeting would be requested from Christopher Hartnett, administrator of FEMA Region 2. It follows a letter from the Financial Oversight and Management Board (JSF) asking FEMA’s leadership to state its official position on the practice of 22 municipalities that opted to impose higher construction taxes on projects paid with federal funds. Hernández said the meeting would explain Puerto Rico’s idiosyncrasies and the local laws governing the taxes, which have existed since 1991, when the Autonomous Municipalities Act was created.
The board’s letter, dated October 1, was addressed to FEMA national administrator Cameron Hamilton and included a list of the 22 municipalities: Adjuntas, Añasco, Cabo Rojo, Camuy, Ciales, Cidra, Guánica, Guaynabo, Lajas, Lares, Maunabo, Orocovis, Peñuelas, Ponce, San Germán, San Sebastián, Toa Alta, Trujillo Alto, Utuado, Vega Baja, Vieques and Yauco. The board had circulated the list on September 15 in a separate letter to Republican Congressman Paul Gosar, chair of the Oversight and Investigations Subcommittee of the Natural Resources Committee.
Separately, the U.S. Department of Housing asked mayors whether they charge different rates on federally funded projects; what that request will lead to is not yet known.