Puerto Rico budget woes deepen (BBC) {gov't is BROKE}

[eppur_se_muova]

Thousands of workers in Puerto Rico are threatening to go on strike after a budget crisis partially shut down the island's government.

The administration of the US territory has a $740m (£406m) deficit but neither the governor nor the legislature can agree how to resolve the problem.

More than 40 government agencies have been hit, making thousands jobless.

The crisis has led international credit rating agency Moody's to downgrade Puerto Rico's bonds.
***
Last week, the administration was forced to close 43 government agencies putting 95,000 people out of work. All schools were closed, meaning half a million students were sent home.
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more: http://news.bbc.co.uk/2/hi/americas/4752647.stm

Funny, I haven't seen a darned thing about this on CNN's Web site -- did they not notice that thousands are protesting in the streets? Nah, they couldn't miss something like that. Guess the Brits care more about what's going on in Puerto Rico than we do. You would think, though, that CNN would at least cover any comments ** made about the situation at his press conference ... say, when is his next one, anyway?

For those who don't know it, PR offers very strong incentives to pharmaceutical companies who relocate to the island. IIRC, this is possible becauce of (US) Congressional legislation which excludes PR, a US "territory", from certain legal restrictions which hold in the US states. Unfortunately, I don't know the details, having heard this long ago. Would appreciate if others could post links or details.

... Puerto Rico, in general, has carved out a niche in pharmaceutical manufacturing. The island is home to 86 pharmaceutical and 59 medical device manufacturing plants. Some 16 of the top 20 selling drugs in the world are made in Puerto Rico, nine of which are produced there exclusively.

... Puerto Rico’s manufacturing productivity levels, in general, outrank those of the UK, continental US and Canada.

A shot in the arm to the pharmaceutical industry, Puerto Rico recently passed legislation to further promote R&D projects in Puerto Rico. Companies can deduct double the cost of any R&D or job training done on the island. In addition, the government allows for accelerated depreciation and a 100% deduction for initial construction and first-year operations.

The low cost of operating on Puerto Rico, plus local government incentives, tax advantages and workforce technical expertise were prime reasons for Mayne’s expansion. The local economic development agency has also lent a helping hand.

from http://www.fdimagazine.com/news/fullstory.php/aid/636/Puerto_Rico%92s_productivity_pulls_in_pharmaceuticals.html

[burrowowl]

1. A U$ of A Territory

Almost a State! The whole Nation is going broke too.

[geomon666]

2. If the government can't agree...

then the people need to install one that does. This is BS.

[AlamoDemoc]

3. There's been little coverage of this story....this story has to get out

[sleipnir]

4. There's been plenty of walltowall coverge here in NYC, for obvious reasons

It's a shame what's happening down there. The plan on the table is to add a 6 percent sales tax to all items. Quite a radical change when you're used to not paying anything, like few states here.

No, the real riots are going to happen when all these people start running out of money in about 1 or 2 weeks and no prospect of actual employment.

[laheina]

8. Is that on the local NY news?

I hadn't heard anything about it in Cali before now.

I need to go get a paper.

[madrchsod]

5. it`s all over the spanish language channels

...we get only "happy news"

[madrchsod]

6. i do know something about medical device production

and that is the people who run those machines are the in a class all by themselves. to make a medical device costs tens of millions of dollars to set up and operate. i didn`t realize that pr had this many production facilities.i`m impressed

[semillama]

7. I happened to be in Puerto Rico when the protests started

I was there for a conference. The protests were very well organized. The marches started at 8, and by 7am, vendors selling water, hot dogs and bootleg Simpsons t-shirts with protest slogans on them were set up along the route. Thousands of people, all demanding accountability. Pretty nice.

[Bacchus39]

9. I believe the incentives to pharmceutical companies have been eliminated

they were phased out. the pharmaceuticals were allowed to "repatriate" the profits to the US tax free.


a little more on Section 936 tax incentives.

Under the terms of 936, US companies were exempt from paying federal income tax on profits earned by their Puerto Rican manufacturing subsidiaries. The idea was to generate year-round employment in Puerto Rico-and that it did. In the late 1980s, nearly 170,000 inhabitants of this US commonwealth had factory jobs, making everything from brassieres to birth-control pills.

In 1995, however, Congress approved a 10-year phase-out of the tax subsidy grandfathering companies already in Puerto Rico but denying the benefit to newcomers. The program will end completely on December 31 2005. Xavier Romeu, Puerto Rico's secretary of economic development and commerce, says that New Economy investments will take the place of Old Economy investments under 936. "Nothing has taken the place of 936, yet contrary to all the predictions that we were going to lose hundreds of thousands of jobs, the opposite has been true," he says. "We're experiencing another expansion in manufacturing, particularly in high-tech contract manufacturing and R&D:'

http://www.findarticles.com/p/articles/mi_qa3715/is_200010/ai_n8903459

[eppur_se_muova]

11. Thanks for that info. I tried a Google search and came across so much ...

"pro-business" propaganda put out by the pharma companies and their minions that I couldn't fish out what I was looking for (not quickly anyway).

[Guy Whitey Corngood]

10. Maybe this is just a preview of what ya'll can expect here with another 8

years of rethugs in charge. We were also told during the 90s that the economy was just dandy and only lazy asses couldn't find work.