The Municipal Revenues Collection Center (CRIM by its Spanish acronym) board opted Thursday for the sale of the agency’s portfolio of overdue accounts receivable as “the only viable measure” presented by the Financial Oversight & Management Board (FOMB) that would enable municipalities to cover an estimated $191 million in debt owed the central government as a result of a federal court ruling annulling Act 29, CRIM Chairman Javier Carrasquillo Cruz said Friday.
The Cidra mayor said the measure would involve the sale of the portfolio of back taxes owed to CRIM to a company that would then proceed to make collections on the overdue local property taxes. However, he acknowledged that the sale process could take months and the amount of money that can be generated from the proposed debt sale has yet to be determined.
The CRIM board decided to look at all of the oversight board’s proposals to address the debt issue and voted for the sale of CRIM’s portfolio of back taxes,” he told Caribbean Business, noting that the back-tax portfolio sale would only address the debt owed by the end of current fiscal year 2020, ending June 30.
The measure was only one of the alternatives contained in a repayment plan presented this week by the FOMB that would allow municipalities to reimburse the central government for monthly pension payments of retired public employees on a pay-as-you-go basis (PayGo), and for the Health Insurance Services Administration (ASES by its Spanish acronym), which runs the government health program for the medically indigent. The impending budget crisis that could result from the immediate payment of the debt could bankrupt many towns, Carrasquillo said.