Wanda Vazquez unveils $787 million stimulus plan for Puerto Rico

by Mar 25, 2020Economy, Puerto Rico0 comments

Standing in stark contrast to many of its European and Asian counterparts, the United States has taken a largely decentralized approach to dealing with the ongoing COVID-19 pandemic. Said non-uniform rollout has allowed the nation’s governors to enact measures they view as appropriate. One governor that has chosen to enact particularly sweeping measures to contain the spread of the virus has been Wanda Vazquez Garced (NPP, R), Governor of Puerto Rico; these measures have included the mandatory closing of non-essential businesses, enactment of a 7:00 pm curfew, and the banning of non-family gatherings. The economic fallout of such measures is estimated to cost the US territory upwards of $4 billion. 

In an effort to mitigate COVID-19-induced economic turmoil, Vazquez has approved via executive order an economic stimulus package that would allocate $787 million to Puerto Ricans unable to make, among other expenses, debt service payments. The degree to which the stimulus supplants wages varies by industry, with 100% of non-municipal, state employees continuing to receive their full salary. In addition to providing relief to government employees, the stimulus package contains a number of provisions aimed at ensuring privately owned businesses in Puerto Rico stay solvent during the government-mandated demand shock. Amongst these provisions, the suspension of sales tax collection for a period of three months and a transfer of $1,500 to small and medium-sized companies. 

The stimulus also allocates over $400 million to hospitals and schools, the latter of which seeks to give schools sufficient funding for the technology that makes online schooling a feasible alternative to in-class instruction. Self-employed workers will also see relief from the stimulus, which grants such employees a payment of $500. In addition to the stimulus, Vazquez ensured essential services would not be cut during the crisis, as well as announcing a three-month moratorium on mortgage, car, personal loan, and credit card payments. 

In addition to the funding from Vazquez’s stimulus plan, the majority of Puerto Ricans will be eligible to receive federal stimulus money as part of the CARES Act.