This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Life In Puerto Rico Becomes Costlier Amid Crisis

Next year, the economy is expected to contract by as much as 2 percent as Puerto Rico remains burdened by $69 billion in public debt and an unemployment rate of 13.9 percent, higher than any U.S. state.

"It's like a Catch-22," Velez said. "The big question is whether the economy is capable of absorbing the impact of these taxes. .... It's a question we cannot yet answer."

Some critics say the island's public spending is the problem.

The new business tax was enacted "to maintain a level of government spending that Puerto Rico's economy cannot sustain," said Priscilla Vazquez, spokeswoman for the Manufacturers Association of Puerto Rico, which is requesting a moratorium on the tax.

Tens of thousands of Puerto Ricans have already left the island for better opportunities elsewhere, including Olivo's two sons who sought new jobs in the U.S. Olivo said he is too old to start a new life with them, noting he's still paying a $750 monthly mortgage and tuition costs with the help from his wife, a social worker.

Meanwhile, Olivo's monthly water bill has more than doubled from $70 to $150, and gas prices have spiked following an increase in taxes on each barrel of crude oil from $3 to $9.25. He's adjusted by spending more time at home or walking instead of driving. If forced to use the car, Olivo buys only a few gallons (liters) at a time. He said three years have passed since he last bought any personal items for himself.

"Those increases have been a disaster," he said. "I can't afford to live in Catano now on Social Security alone. ... I used to make more than $80,000 a year. To go from $80,000 to $0, imagine that."

Such reactions prompted Treasury Secretary Melba Acosta to delay a portion of the oil tax increase in mid-August to give officials time to study its impact on prices, while the state water and sewage company has made concessions to help lower water bills for certain commercial and private consumers. As it stands, residential clients who use up to 35 cubic meters of water a month are paying almost double now. Some commercial clients have seen their bill go up by several thousands of dollars.

2 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG

Markets

DOW 18,126.12 -36.87 -0.20%
S&P 500 2,120.79 -2.69 -0.13%
NASDAQ 5,097.9760 -8.6170 -0.17%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs