Puerto Rico's government appeared to fail Thursday to line up enough votes to approve a 68 percent increase in the crude oil tax, casting doubts on plans to raise as much as $2.9 billion needed to keep the troubled U.S. commonwealth solvent.
The impasse in the legislature on the last day of the session to approve the measures could force the administration of Governor Alejandro Garcia Padilla to try to push the legislation through in a special session later in the year.
Garcia Padilla told reporters he still held out hope that lawmakers would approve the boost to the excise tax on crude oil by $6.25 per barrel to $15.50 per barrel, starting in March. The move would generate about $178 million in additional revenue annually.
"I'm confident they will do what's right," the governor said on Thursday afternoon following a tour of Lufthansa Technik's new aviation maintenance, repair and overhaul (MRO) facility being constructed at Rafael Hernández Airport in Aguadilla.
The prospects for approval grew dimmer in the afternoon with the session set to run until midnight and the governor facing a revolt from six members of his own Popular Democratic Party. Members of the opposition New Progressive Party opposed the tax.
"There are colleagues who continue to oppose the oil increase and others with serious doubts about the way this is being handled," said veteran Popular Democratic Party Rep Luis Raul Torres on Thursday, himself an opponent of the oil hike.
The bonds would refinance a Government Development Bank (GDB) loan to the cash-strapped Highways & Transportation Authority. The head of the GDB Melba Acosta-Febo told newspaper El Nuevo Dia on Thursday that the GDB aims to complete the deal in November.
House Speaker Jaime Perello said he would consider the oil tax hike as part of broader tax reform that is expected early next year, but approved so that it takes effective retroactively for the entire 2015 calendar year.
Twenty-six votes are needed to approve legislation in the house, with the PDP controlling 28 of the 51 seats in the legislature. The governor has always been able to line up sufficient support from his own party in the past, despite opposition from individual lawmakers.
Garcia Padilla tried to line up the necessary votes on Wednesday evening at a meeting with lawmakers where he tried to convince them of the importance of the measure. (Reporting by Reuters in San Juan; Writing by Edward Krudy; Editing by Alan Crosby)
Puerto Rico lawmaker revolt casts doubt on financing lifeline
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