Puerto Rico Revenue Tops Forecasts by $1 Billion Despite Turmoil
(Bloomberg) -- Puerto Rico's revenue outstripped its forecasts by $1.1 billion in the fiscal year that ended June 30, giving the bankrupt island a cash boost as it faces a succession crisis over whether Governor Pedro Pierluisi illegally took office after large street protests forced the resignation of his predecessor.
The commonwealth collected $11.38 billion of net general-fund revenue from July 1, 2018 through June 30, 2019, according to Puerto Rico's Treasury Department. The stronger revenue performance comes after island officials anticipated that the economy, which had been in a recession for more than a decade, would grow by 4% during the year as federal disaster aid and insurance money flowed in to help rebuild from Hurricane Maria.
Puerto Rico has been embroiled in a political crisis for the past month after protesters demanded the resignation of former Governor Ricardo Rossello over the release of chat messages in which administration officials disparaged residents and political rivals. Pierluisi, Rossello's pick to succeed him, was sworn in on Friday but Senate President Thomas Rivera Schatz filed suit in Puerto Rico court, demanding that Pierluisi give up exercising the functions of the office.
Prices on most Puerto Rico securities have gained during the political turmoil, as investors bet that a federal oversight board that manages the island's finances and its bankruptcy may gain more power. General obligations with an 8% coupon and maturing in 2035, one of the island's most-actively traded securities, changed hands Monday at an average 54.4 cents on the dollar, up from about 52 cents at the start of July, according to data compiled by Bloomberg.
Tax revenue from businesses totaled $2.49 billion, the biggest contributor, followed by $2.3 billion of sales-tax revenue, $2.2 billion from individuals and $2.08 billion from multi-national corporations, according to the Treasury Department.
--With assistance from Michael Deibert.
To contact the reporter on this story: Michelle Kaske in New York at mkaske@bloomberg.net
To contact the editors responsible for this story: Elizabeth Campbell at ecampbell14@bloomberg.net, William Selway, Michael B. Marois
©2019 Bloomberg L.P.
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