Politics

Puerto Rico’s Gov. Fortuno Shows Washington the Way

SAN JUAN, Puerto Rico–The gridlocked members of the congressional Supercommittee should grab President Obama and decamp to a tropical island. Specifically, they should visit Puerto Rico, where a courageous leader is using free-market reforms to reinvigorate this recently moribund U.S. territory.
 
We are clearly pro-growth, says Republican Governor Luis G. Fortuño. And we do not apologize for that.
 
Fortuño last Tuesday hosted a delegation of conservative luminaries who floated into San Juan aboard the Holland America Lines MS Eurodam, site of National Review magazines latest Caribbean cruise.
 
Fortuño was inaugurated on January 2, 2009, just 18 days before Obama. Since then, these two officials have marched in opposite directions, with opposite results.
 
We were closer to the abyss than most states, Fortuño says. When I came into office, we were facing not just the worst recession since the 30s, but the worst budget deficit in America, proportionally. We were literally broke. We did not have enough money to meet our first payroll. We had to take out a loan to do that. At that point, my wife asked me if we could ask for a recount.
 
So, unlike the free-spending Obama, and G.W. Bush before him, Fortuño declares: We cut expenses.
 
Fortuño gave himself a 10 percent pay cut. He trimmed his agency heads salaries by 5 percent. That bought him the credibility to chop overall spending by 20 percent. He booted some 20,000 government workers, through attrition as well as layoffs, saving $935 million. (Compare that to Bush-Obamas 11.7 percent hike in federal civilian headcount since the Great Recession began in December 2007 excluding temporary Census jobs.) Fortuño has shifted remaining government workers from old-fashioned, statist, defined-benefit pensions to modern, market-friendly, defined-contribution plans.
 
Ranked No. 51 in 2009, behind each of the United States, in terms of deficit-to-revenue, Puerto Rico now is 15th, with the $3.3 billion deficit Fortuño inherited (44 percent of revenues) now macheted to $610 million (7.1 percent). Fortuño reforms, including merging government agencies, led Standard & Poor’s to upgrade Puerto Rico’s credit rating for the first time in 28 years. S&P, of course, famously downgraded U.S. sovereign debt last August, an historical first. Meanwhile, Americas national debt screamed past the $15 trillion mark on Wednesday.
 
Fortuño has sliced taxes. The corporate tax rate plunged last January 1 from 41 percent to 30, en route to 25 percent in 2014. He cut average individual tax rates by one quarter this year and in half within six years.
 
You needed to obtain an average of 28 permits and endorsements to do anything, Fortuño says, regarding regulatory relief. You had to go to 20-plus different agencies to do that. Today, you go to one agency, and you get your permit there, or you can go to PR.gov, and get it online.
 
We have created a better business climate, and it shows, Fortuño explains.
 
A five-year property-tax holiday and the scrapping of capital gains and death taxes have helped push existing home sales up 35 percent this year (while they fell 7.9 percent on the Mainland) and new home sales soaring 92.2 percent (as they sagged 9.9 percent up north).
 
CVS, Nordstroms, Pet Smart, P.F. Changs, Saks Fifth Avenue, and Victorias Secret all are opening in Puerto Rico. Theyre coming in brand new, for the first time, ever, Fortuño says. Honeywell and Merck are expanding manufacturing facilities. Venezuela’s Banesco is the first new bank to open in Puerto Rico in 13 years.
 
We are moving in the right direction, Fortuño smiles. We are creating jobs in the private sector, not in the public sector, the way we should be. So, we can keep lowering taxes.
 
Ronald Reagan and Margaret Thatcher are among Fortuño inspirations. Volumes by and about those visionaries grace Fortuño’s bookshelves. A small sign on his desk replicates one in Reagan’s Oval Office. It explains Luis G. Fortuño’s success, begs Washington to listen, and simply says: It CAN be done.

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  • certainlynotme

    Unless you have been to Puerto Rico you might not fully appreciate the magnitude of Gov Fortunos’ actions. Something like 60% of the working population is employed by the government. There are regular strikes and demonstrations….even by students that dont like the cost of higher education. I saw a story a couple of years ago about difficulty in finding workers for the Puerto Rican coffee growers. Not an easy job but it paid surprisingly well and include transportation and free meals.As a whole they have a socialist mentality. 

    My hat is off to this man. Conservatives everywhere should tout his accomplishments!

  • Mike_in_Wasilla

    All that success I’m suprised he’s not being sued by the Jusice Dept.

  • Mike_in_Wasilla

    I guess this means the end of the democrats’ push for statehood.

  • http://blog.coquipr.com Luis J. Villanueva

    Interesting that this article failed to check what the unemployment rate is, which has between 15-17% for the whole Fortuño’s administration and the labor force size keeps getting lower. Professionals are leaving PR because they can’t find jobs. 

    Data from the US Dept of Labor: http://data.bls.gov/timeseries/LASST43000003

  • http://blog.coquipr.com Luis J. Villanueva

    Facts, facts, facts…

    Government employment wasn’t “something like 60%”, which would be impossible, but ~30% (http://grupocne.org/cneblog/?p=310). If only there were employment in the private sector, but as usual neocon rethoric, the results never materialized. Why promote something that has not worked? (http://data.bls.gov/timeseries/LASST43000003)

  • Master Aries

    I have noticed they aren’t talking about that anymore.

  • Guest

    I remember not very long ago when many (including me) were saying of the Puerto Rico statehood rumor, “They just want statehood so they can get more money from D.C.”

    They didn’t need us, did they? BRAVO for the well-named Governor Fortuno! But a word of warning here – Governor, if obama comes smiling your way, holding out an olive branch and a statehood offer,  run the other way! Now it’s D.C. who wants to siphon off the few dollars you have, in the American tradition, created.

    You might seriously want to declare independence-fast-right-now, before our marxist prez decides to enfold Puerto Rico in his voracious embrace. Or invade you. You have shown the world again that capitalism works, and you’re far too geographically close for comfort to a marxist “leader” whose attempt to take over America is in trouble. He is (I guarantee it) very angry with you. He will (I guarantee you) do whatever it takes to destroy you.

  • aballer1515

    30% is still WAY WAY WAY WAY too high even if your source is correct. It should be no more than 5%.

    What do you propose as solutions? Keep doing what they were doing and stay in 51st place in deficit to revenue ratios. Are you arguing that the government is not big enough? You are part of the problem in our country, congratulations.

  • aballer1515

    You are just a government crony like every other liberal, have a little independence. Unemployment is going to tick up a little bit as they shed their oversized government workforce. But as businesses expand as they are already doing it will keep going lower and lower.  You are just a hater, with no solutions.

    Are you disputing these facts:

    “Ranked No. 51 in 2009, behind each of the United States, in terms of deficit-to-revenue, Puerto Rico now is 15th, with the $3.3 billion deficit Fortuño inherited (44 percent of revenues) now macheted to $610 million (7.1 percent). Fortuño reforms, including merging government agencies, led Standard & Poor​’s to upgrade Puerto Rico’s credit rating for the first time in 28 years. S&P, of course, famously downgraded U.S. sovereign debt last August, an historical first. Meanwhile, Americas national debt screamed past the $15 trillion mark on Wednesday.” 

    “A five-year property-tax holiday and the scrapping of capital gains and death taxes have helped push existing home sales up 35 percent this year (while they fell 7.9 percent on the Mainland) and new home sales soaring 92.2 percent (as they sagged 9.9 percent up north). CVS, Nordstroms, Pet Smart, P.F. Changs, Saks Fifth Avenue, and Victorias Secret all are opening in Puerto Rico. Theyre coming in brand new, for the first time, ever, Fortuño says. Honeywell and Merck are expanding manufacturing facilities. Venezuela’s Banesco is the first new bank to open in Puerto Rico in 13 years.”

  • Niniane

    Just wish we could trade Obama for this guy. Since 2009 Obama’s stubborness won’t give way to the reality of the destruction he is causing. And his ego won’t allow him to either admit he is wrong or allow him to realize that the American people do not see him as the savior he believes he is.

    Fortuno for President in 2012! Just hope he speaks English…

  • http://blog.coquipr.com Luis J. Villanueva

    I’m not saying anything, just correcting a factual error. If we don’t know the facts we can’t have a good understanding of the real situation.

  • Huperetes

    Excellent highlighted points, aballer!

    A five year property tax holiday:  what a breath of fresh air!!!   Scrapping the death tax is the way to go.  These tax reductions lead to economic growth as evidenced by a 35% surge in existing home sales.  That is real growth!

    DMTyler

  • http://blog.coquipr.com Luis J. Villanueva

    I point at a fact that is driving a lot of the problems in PR but all you can answer is with an ad hominem attack. Not worth expanding.

  • http://twitter.com/deborah677 Deborah

    What I don’t understand is why we don’t see this all over the place.  (I guess I really do understand – but am dissappointed.) This is exciting news!  It is a very real recent reminder that less government, and more capitalism makes for an exciting, creative, properous people and economy.  I am sure our entire political structure hopes this just stays under the rug – their influence and power would dissolve.  In effect they would become irrelevant.  We are a nation of great people!  I agree that initially it would be difficult as the private sector adjusted and began to once again do what it does best – adapt and create!!  WE are the private sector.  We have allowed a political class to take over, and the only thing they are concerned about is their own power and influence, we are not on their mind when they are hatching up the next way to spend our money and bilk us out of yet more money and personal freedoms under the law.