The Weekly Journal - Wednesday, June 30, 2021

Puerto Rico and the Caribbean

Wednesday, June 30 - July 6, 2021 - // no. 114

www.theweeklyjournal.com

Cooperation on Gov’t Budget P6 Pierluisi Supports $8.50 Minimum Wage P8 Freight Rates Controversy Continues P9-10

>Archive

Five Years of Promesa Oversight Board affirms it has achieved much, but there’s still much to be done

O

>AP/José Juárez

Istra Pacheco and Rosario Fajardo

The Special Edition Corvette Stingray P15

n June 30, 2016, when then-President Barack Obama signed the Puerto Rico Oversight, Management and Economic Stability Act (Promesa) into law, he warned that the island’s scenario was complicated because it couldn’t pay back the government’s $70 billion-plus debt load. Even so, he stated that “Puerto Rico is up to the challenge of stabilizing the fiscal situation, restoring growth and building a better future for all Puerto Ricans.”

Five years since Promesa was enacted, which paved the way to filing the largest bankruptcy in the history of the municipal bond market, the federal law’s outlined goals are still on the table.

Promesa brought along the Financial Oversight and Management Board (FOMB) to oversee public finances and help implement changes to improve the local economy and reach agreements with creditors.

Today is the fifth anniversary of Promesa.

Since then, there have been four governors in GO TO PAGE 4

The Weekly Journal > Wednesday, June 30, 2021 >

2

Cliente de depósito de Santander, ¡bienvenido a FirstBank!

Te compartimos información importante sobre el proceso de integración.

JULIO

8

Jueves, 8 de julio de 2021

• En las ATM de Banco Santander podrás retirar, depositar efectivo y cheques hasta las 3:00 p.m.

JULIO

12

En eBanking de Santander, podrás:

• Realizar transferencias a otros bancos hasta las 4:00 p.m.

• Utilizar el servicio de Pago Express hasta las 5:00 p.m.

• Depositar cheques por Depósito Simple Móvil hasta las 7:00 p.m.

DESDE

JULIO

9

Viernes, 9 al domingo, 11 de julio de 2021

• Las sucursales de Santander estarán cerradas. Las estaremos convirtiendo a los sistemas de FirstBank.

• El servicio de ATM estará disponible solo para retiros desde el viernes, 9 de julio a las 3:00 p.m.

En eBanking de Santander:

• Podrás hacer transferencias entre tus cuentas y cuentas a terceros de Santander hasta la 7:00 p.m. del viernes, 9 de julio de 2021.

Escanea este código QR para descargar la guía de orientación.

Miembro FDIC. Productos y servicios están sujetos a los términos y condiciones de FirstBank.

Lunes, 12 de julio de 2021

• Tu cuenta, las sucursales y los servicios de Santander serán integrados a los sistemas de FirstBank.

Recuerda, a partir del 12 de julio:

• Repasa la carta que recibiste sobre tu cuenta de depósito.

• Si tienes una Santander Express Mastercard, podrás utilizarla como de costumbre hasta nuevo aviso. Si recibiste tu nueva tarjeta de débito, Visa de FirstBank, actívala.

• Actualiza la información de tus pagos automáticos y comercios en línea. Tu nuevo número de ruta y tránsito es el 221571473.

• Accede y/o regístrate en Tu Banca Digital.

Visita bienvenidoafirstbank.com donde encontrarás información adicional que te ayudará en el proceso de integración.

3

/ Wednesday, June 30, 2021

a week in review Over 300 Permanent Reconstruction Projects Completed With FEMA Funds

>Archive

>Carlos Rivera Giusti

>Carlos Rivera Giusti

An estimated 337 permanent works projects, with funds allocated under FEMA’s Public Assistance program, have been completed in Puerto Rico, according to the Central Office of Recovery, Reconstruction and Resilience (COR3). To date, of the 337 permanent works projects completed, COR3 has disbursed more than $13.8 million, corresponding to 220 projects. The works include reconstruction of roads and bridges, buildings, water control facilities, and parks and recreational facilities that were damaged due to the 2017 hurricanes.

LUMA Delivers Emergency Management Plan As part of its contractual responsibility to be prepared to manage any emergency that would affect the electricity transmission and distribution system in Puerto Rico, LUMA Energy developed an Emergency Management Plan, which was submitted to the Public-Private Partnerships Authority, Puerto Rico Energy Bureau (PREB) and legislative committees that have requested it. PREB said it had granted provisional approval of the plan.

Powered BY El Vocero de Puerto Rico, 1064 Ave Ponce de León 2nd floor San Juan, PR Postal Address: PO Box 15074, San Juan, PR 00902

President Salvador Hasbún shasbun@elvocero.com Vp of Marketing and Business Operations Michelle Pérez Miperez@elvocero.com

Manufacturing Grows for 11 Consecutive Months Manufacturing industry activity in Puerto Rico reflected an increase for the 11th consecutive month, according to the March 2021 Coincident Indicators Index in Manufacturing, produced by the Economic Development and Commerce Department. In March, a preliminary value of 104.4 points was registered, which reflects an increase of 0.5 points in relation to the previous month. When comparing the March 2021 numbers with those same of March 2020, the manufacturing index registered an increase of 0.3 percent.

VP of Accounting Félix A. Rosa frosa@elvocero.com

Human Resources Director Arlene Rolón, PHR arolon@elvocero.com

VP of Editorial Content Juan Miguel Muñiz Guzmán jmuniz@elvocero.com

VP of Production Eligio Dekony edekony@elvocero.com

Traffic Director Ilia M. Pérez Centeno iperez@elvocero.com

Multi-Platform Graphic Director Héctor L. Vázquez hvazquez@elvocero.com

Multi-Platform Digital Director María Arce marce@elvocero.com

Phone: 787-622-2300, 787-721-2300

Assistant Editor/ Reporter Rosario Fajardo rfajardo@wjournal.com

Customer Service: 787-622-7480

4

/ Wednesday, June 30, 2021

Members of the FOMB during a May 2021 public meeting. >Brandon Cruz González

CONTINUED FROM PAGE 1

District Court Judge Laura Taylor Swain, who is overseeing the process. The Oversight Board also affirmed that the selection of LUMA Energy to take over PREPA’s energy transmission and distribution system is a “great step” towards transforming the island’s energy system and infrastructure, although the FOMB says that this is not enough for PREPA’s overhaul.

Puerto Rico and no balanced budget, as required by the federal law, nor have essential services been defined. The Oversight Board argues that it has made “great progress,” while the sectors that analyze Puerto Rico’s financial scenario have different opinions among themselves, with some saying that another bankruptcy could emerge in a decade.

A Failed Colonial Experiment?

FOMB spokesperson Edward Zayas assured that The Center for a New Economy noted that it did much has been achieved, while FOMB Chairman not support the Promesa bill for several reasons, David Skeel stated earlier this year: “We hope that among them, that “the political costs associated we are on track for Puerto Rico to emerge from with the oversight part of the bill bankruptcy, ideally before the [were] extremely high and quite end of the year.” definite, while any benefits to be Zayas listed several derived from debt restructuring accomplishments, including the [were] fairly uncertain and restructuring of the secured contingent on the successful debt of the Puerto Rico Sales Tax According implementation of a complicated, Financing Corporation (Cofina to the FOMB, if at new territorial debt restructuring by its Spanish acronym), which the end of 2021 process.” was lowered from $18 billion to the restructuring Now, five years on, the CNE $12 billion, as well as adjusting agreement of $35 issued a policy brief, stating that the debt of the Government billion in central unfortunately, time has proven Development Bank from $5 billion government debt that their initial assessment was to $2 billion. He added that the the largest amount essentially correct. “To be fair, Puerto Rico Aqueduct and Sewer - is confirmed, a Puerto Rico has had a respite Authority (PRASA) also achieved reduction of $60 from bondholder claims and has an adjustment in the annual billion will have been been able to spend money that payment of part of its debt, with a achieved. otherwise would have gone to cut of $380 million. debt service. However, the stay According to the FOMB, if at on litigation did not apply to the end of 2021 the restructuring other legal (nonpayment) claims agreement of $35 billion in while the debt restructuring central government debt - the largest amount - is process, although orderly, has been extremely confirmed, a reduction of $60 billion will have been slow and expensive. achieved.

“With respect to the longer-term goals of Zayas pointed out that the COVID-19 pandemic Promesa, we are still a long time away from put some advanced negotiations on hold and that regaining access to the capital markets and a restructuring had been negotiated that covered balancing our budgets. All the while an unelected most of the creditors of the Puerto Rico Electric ‘dictatorship for democracy’ keeps making Power Authority (PREPA), which is before U.S.

In fact,

decisions crucial to Puerto Rico’s future,” as per the CNE. While the San Juan-based think tank noted that much has happened in five years and some events were beyond the FOMB’s control, “their actions to date reinforce the argument made by CNE back then, that PROMESA would not provide the platform to achieve political, economic and social stability. If Promesa was drafted, as some government officials stated back in 2016, to chart a sustainable path forward, then the bottom line is that the current track is far from sustainable.

“Worse yet, a whole host of proposals made by the financial body in its most recent Fiscal Plan suggests that FOMB members themselves don’t quite understand how their sequester-like cuts across the government will continue to hinder any chances of success for the island,” according to the policy brief.

Analyzing the Current Situation

Some sources interviewed by THE WEEKLY JOURNAL opined that Promesa was not necessary to resolve the debt’s nonpayment, but others assured that without the statute, chaos would have unleashed in the markets that would have lacerated the credit capacity of everyone in Puerto Rico.

House Speaker Rafael “Tatito” Hernández said that to complete the process in a positive way “it is essential to reach an understanding, in which we all work together to support the renegotiation of the government debt,” but “subject to a clear date and without delaying the fiscal entity’s departure.”

Eva Prados, executive director of the Citizens Committee for the Debt’s Audit, affirmed that the first thing that had to be done was a thorough study with the appropriate standards to establish which debts were illegally issued, to leave them out of the restructuring. Then, she indicated, it was necessary to sit down with the creditors and present them with information on what can be

5

/ Wednesday, June 30, 2021

Thus, as we stated in 2016, the economic, political and social costs associated with the colonial Promesa experiment have been extremely high and explicit, while any benefits we may have derived from it have been small and most remain quite uncertain and contingent.

-Center for a New Economy

paid without dismantling the services offered in schools and hospitals, the University of Puerto Rico and without cutting pensions to avoid a “humanitarian” crisis.

“I do not see any positive results from the presence of the FOMB. In these five years what we have seen is a lot of suffering and backwardness...

The Board is supposed to define the essential services in any case, make sure that the funds are allocated to provide those services, and with what is left over then say: ‘this it is what I have to contribute to the debt,’ not the other way around.

But if who represents us is an entity that was not selected by the people and that has no real commitment to the welfare of the people, plus they have conflicts of interest, then we see how

FOMB Executive Director Natalie Jaresko >Brandon Cruz González

many errors have happened in five years,” Prados stated.

She opined that the Board is lobbying so that there is no parity in Medicare funds, while the debt restructuring agreements pending approval are so beneficial for creditors and so bad for the island, that in 10 years all the projections “point to

An important priority for the FOMB has been restructuring the Puerto Rico government’s bankruptcy process, including that of the Puerto Rico Electric Power Authority. >Josian E. Bruno Gómez

us being bankrupt again.”

The Benefit of the Stay

Economist Heriberto Martínez Claro believes that the only real benefit that Puerto Rico obtained from the law was to stop paying the debt. “If this ‘stay’ had not been decreed, the market would have collapsed. The contagion effect was created because Puerto Rico’s municipal bonds are part of other larger financial packages, [but] it is not known exactly what they are or where they are.

Faced with that uncertainty, everyone would have panicked, and access to credit for both the country and the people would have been halted. They would begin to deny you loans in the banks, in the cooperatives, you cannot buy on credit to keep your business operating. There would have been consequences at all levels,” he underscored.

Outside of that protection, the balance, according to Martínez, has been the imposition of “austerity measures” that predominantly impact economically disadvantaged groups, which in the case of Puerto Rico is the majority of the population. He said that there has been little social investment and that the FOMB’s work on welfare “has been a failure.”

Regarding the Cofina agreement approved by Judge Swain, the economist regretted that the debt cut was too little. He criticized the inclusion of the provision that if more money is collected than projected - from the island’s Sales and Use Tax - it must continue to be contributed to the creditors instead of going to the government’s General Fund.

Martínez affirmed that the debt must be audited, particularly the emission made between 2010 and 2011 of $4 billion in PREPA bonds for infrastructural projects. “We have to know what that money was used for then,” he asserted.

6

/ Wednesday, June 30, 2021

La Fortaleza, the Puerto Rico governor’s official residence and office >Josian E. Bruno Gómez

Pierluisi ‘Inclined’ to Sign FY2022 Budget

Seeks Oversight Board’s approval

A Rosario Fajardo

rfajardo@wjournalpr.com

@RosarioWJournal

fter weeks of back and forth talks, Gov. Pedro Pierluisi announced Tuesday that he will sign the fiscal year (FY) 20212022 budget approved by the Legislature to help ensure that it is approved by the Financial Oversight and Management Board (FOMB).

During a tour of a school in the municipality of Naranjito, the governor said he is “inclined” to sign the budget.

“I see myself inclined to sign it. The work team is going over it line by line, but I see myself inclined to sign it to make a common front before the board and for the board to approve it,” Pierluisi stated. “It’s good that the board approves the budget of the government of Puerto Rico, and that would happen if I sign it because we would be aligned with the House, the Senate and the governor.”

He also welcomed the removal of language that would have required the governor to procure the Legislature to make some changes in the budget proposal.

Regarding municipalities, which were stripped of access to around $22 million in the so-called Equity Fund, the governor affirmed that the municipal governments will receive federal funds this year that will help offset that budget slash.

The FOMB’s budget is for $10.1 billion, which is similar in amount to that passed by the Legislature. La Fortaleza’s budget submission was around $10.3 billion.

Previously, Pierluisi had said that the $10.1 billion budget falls short of what he wanted, “but in the spirit of avoiding controversies and reaching a consensus, we are willing to accept this as the budget amount.”

In previous years, there was a distinct lack of cooperation among the three entities. Technically, the Oversight Board has the power to impose its own budget, which it has done in the past. But this time the three entities have been able to reach an agreement on various assignments. For example, the FOMB wants language removed that would restrict the governor from reassigning funds.

The FOMB’s Natalie Jaresko, left, and David Skeel >Josian E. Bruno Gómez

House leaders said they were willing to do that. For his part, Pierluisi is asking for $15 million for salary raises for correctional guards.

In a June 25, 2021 letter sent to the governor and House and Senate leaders, the FOMB outlined what it would and would not accept.

As per the missive: [S]ubject to and conditioned upon the Legislature correcting the violations set forth in sections I through IV above, and submitting a revised budget that the Oversight Board determines is a compliant budget, the Oversight Board will agree to the following (A) incremental budget requests and (B) reallocations of appropriations.

A. Incremental Budget Requests: 1. $4,059,000 for Legislature employee liquidations costs 2. $1,728,000 for FY2022 Legislature PREPA/ PRASA expenditures 3. $3,729,000 for prior period Legislature payables to PREPA/PRASA 4. $3,000,000 for incremental Legislature FY2022 payroll of which $1,500,000 is subject to certain reporting requirements B. Reallocation of Appropriations: 1. Reallocations within the Legislative Assembly’s budget 2. Reallocation of $700,000 from Unallocated Capital Expenditures to the Musical Arts Corporation for the Symphony Orchestra 3. Reallocation of $240,000 from Unallocated Capital Expenditures to the Puerto Rico Institute of Statistics for a study impacting the deaf population.

- Reporter Maricarmen Rivera Sánchez contributed to this story.

/ Wednesday, June 30, 2021

7

Puerto Rico Lawmakers Push to Roll Back Labor Reform

FOMB says no, as it would hurt the economy

I

Rosario Fajardo

rfajardo@wjournalpr.com

@RosarioWJournal

n what has become a recurring theme in recent years, Puerto Rico’s Legislature is set to have another battle with the Financial Oversight and Management Board (FOMB), this time over lawmakers’ efforts to roll back the 2017 labor reform law.

The upper and lower chambers have passed their own version of House Bill 3, which seeks to repeal many of the changes in labor laws that were passed some four years ago. The bill is now in conference committee in the House and Senate.

According to JD Supra, House Bill 3 includes the following: • Reverts to the pre-Labor Reform requirement of paying daily overtime for time worked in excess of eight hours in any rolling 24-hour period, as opposed to in a calendar day; • Creates a three-year statute of limitations for breach of contract claims, wage and hour claims, termination claims, and discrimination claims; • For employees unjustly terminated under Law 80, requires a severance of three months plus two weeks of salary for each year of service for those employees who have worked between one and 15 years and a severance of six months plus three weeks of salary for each year of service for those employees who have worked more than 15 years.

There would no longer be a cap on the Law 80 severance; • Creates a presumption of dismissal without just cause in all cases except where dealing with employees employed for a bona fide fixed time or a bona fide fixed project or fixed work; • Amends Law 80’s definitions of just cause and constructive discharge • Provides double pay for employees who are also students who are required to work on a seventh consecutive day, and consequently forfeit their day of rest; • Increases the accrual of paid vacation and sick leave to 1.25 days for each month in which an eligible employee works at least 115 hours, irrespective of date of hire; • Provides for the accrual of paid vacation time and paid sick leave at 0.5 day per month for employees who work at least 20 hours per week, but less than 115 hours per month;

• Reduces probationary periods to three months and require written notice; • Reverses the Christmas bonus hours worked requirement from 1,350 hours to 700 hours as well as the percentage requirements from 2 percent to 6 percent or 3 percent of salary.

FOMB: Negatively Impacts the Economy, Labor Market

However the FOMB has been categorical that House Bill 3 is “ inconsistent with the Commonwealth’s 2021 Certified Fiscal Plan, and specifically the Fiscal Plan’s human capital and welfare reforms… [T]he Fiscal Plan makes clear ‘the Government must refrain from repealing Act 4-2017 or enacting new legislation that negatively impacts labor market flexibility.’”

In a June 24 missive sent to Gov. Pedro Pierluisi, Senate President José Luis Dalmau and House Speaker Rafael Hernández, the FOMB’s executive director, Natalie Jaresko, outlines their opposition to the bill.

As per the FOMB letter, the bill would reestablish many “ burdensome” labor restrictions and would hinder new investment: • Reverts to the pre-LTFA (2017 Labor Transformation and Flexibility Act) definition of

overtime to require overtime compensation for time worked in excess of eight hours in any rolling 24-hour period, as opposed to any calendar day; • Reverts to the pre-LFTA probationary period during which employers are allowed to terminate employees at will from nine months (12 months for exempt employees), back to three months and requires written notice of the probationary period; • Reverts the mandatory Christmas bonus “hours worked” requirement from 1,350 hours to 700 hours within the 12 month period between October 1 and September 30 of any year, and increases the percent of salary requirements for the bonus from 2 percent to either 3 percent or 6 percent; • Reverts the overtime pay rate for the one day of rest required for every six days worked to up to 2X the regular pay rate if work is performed on the day of rest; • Requires a more progressive structure for indemnity payments adjusted by length of service; • Increases vacation and sick leave accrual rates; • Extends various statutes of limitations for employment-related causes of action; and • Modifies and limits the definitions of just cause and constructive discharge and provides severance for employees terminated without just cause pursuant to Law 80 of 1976.

8

/ Wednesday, June 30, 2021

Gov. Pedro Pierluisi >Carlos Rivera Giusti

Pierluisi Supports Minimum Wage Increase to $8.50 an Hour

Legislative measure only applies to the private sector

G Rosario Fajardo

rfajardo@wjournalpr.com

@RosarioWJournal

ov. Pedro Pierluisi said that he has received a recommendation from the committee he created on the issue, for an increase on Puerto Rico’s minimum wage to $8.50 an hour. The committee that has been studying the matter for a couple of months has been tasked with a recommendation for both the public and private sectors.

This is contrary to what the Legislature has passed, in which the minimum wage increase would only apply to the private sector.

After a meeting earlier this week with New Progressive Party leaders, the governor said $8.50 an hour would be his recommendation.

“I informed the members of the NPP delegation in the House and Senate that the preliminary advice I have received from the multisectoral committee that was created to advise me and help me present a bill that raises the minimum wage in Puerto Rico, is that the amount must not exceed $8.50 per hour and that its validity must begin on Jan. 1, 2022,” Pierluisi said.

The governor is the president of the prostatehood NPP. “That (the recommendation) comes from the multisectoral committee with union representatives, business representatives and economists of the highest reputation, and the

consensus is that the next step, because it must be a continuous process to ensure that the workforce has a fair and reasonable salary, is that the salary is raised to $8.50 an hour from 2022 on,” he added, as quoted by EL VOCERO, the sister publication of THE WEEKLY JOURNAL. Private sector leaders have stated that the minimum wage should be increased, but gradually, and that any initiative must apply to both the public and private sectors. They have also warned that a sudden jump in the minimum wage would lead to thousands of jobs lost, as many businesses would be unable to pay for the increase, as they have already been hit hard by the pandemic.

Minimum Wage Bills in the Legislature

With regard to the issue, Pierluisi was responding to two measures in the Puerto Rico House and Senate, approved by both chambers, that would increase the island’s minimum wage to $8.50 and $9.00 an hour, respectively, but only mandated for the private sector. In other words, the proposed salary increase would not apply to government workers, whether at the commonwealth or municipality level.

Puerto Rico’s minimum wage is $7.25 an hour, which is exactly the same as the federal minimum wage. There has not been an adjustment at the federal or local level since 2009.

The two legislative bills are now before a conference committee in the House and Senate.

As written, House Bill 338 also provides for the creation of the Minimum Wage Evaluation Board attached to the Labor Department, and provides protection for workers in local businesses not covered by the Federal Fair Labor Standards Act of 1938.

Likewise, the bill declares as public policy

adapting the minimum wage to workers’ cost of living, based on the principle that no worker should live below the poverty level and that every worker has enough income to cover his/her basic needs.

“The state minimum wage must be periodically reviewed and adjusted to the increase in the cost of living of workers. This will be the objective metric that will govern the Board’s determinations on the minimum wage,” reads Section 1.02 of the measure, titled “Public Policy Declaration.”

“The Minimum Wage Evaluation Board may, by decree, establish a minimum wage higher than the federal minimum wage established by the Federal Fair Labor Standards Act, approved by the Congress of the United States of America on June 25 1938, as amended. However, you can never set one lower than this,” the bill reads.

The bill mentions that 120 days after the bill is signed into law and until the Minimum Wage Evaluation Board issues a mandatory decree varying the same, the minimum wage in Puerto Rico will be increased to $9.00 per hour for all private sector workers covered under U.S. Reasonable Labor Standards Act, including those in the agricultural industry who are excluded from the aforementioned statute. Exempt from the wage increase would be employees working for government agencies and their instrumentalities, municipalities, and the judicial and legislative branches.

“Regarding those workers subject to tip income, this increase will apply with respect to the minimum wage established in the U.S. Labor Standards Act, providing that the minimum wage set forth herein will be reached in combination with the federal minimum for these workers and tips,” according to the bill.

- Reporter Maricarmen Rivera Sánchez contributed to this story.

9

< The Weekly Journal > Wednesday, June 30, 2021

¡GRACIAS!

10

/ Wednesday, June 30, 2021

Study: Proposed Hike in Ground Freight Rates Impact

Competitiveness, Prices

Proposal represents an additional $45 million a year for households and businesses

I

Giovanna Garofalo

ggarofalo@wjournalpr.com

@giopgarofalo

ndustry leaders warned that the ground freight rates proposed by the Bureau of Transportation and Other Public Services of Puerto Rico (NTSP by its Spanish initials), would adversely impact the ease of doing business on the island and increase the prices paid by consumers.

Specifically, the proposed increase over the presently regulated rates would be 35 percent, while the estimated impact of the rates proposed by the NTSP for long-term contracts is 21 percent.

In other words, truckers working with long-term contracts would receive 21 percent in additional revenue, while companies’ expenses for these services would rise by the same percentage.

The NTSP issued Circular Memo 35-2020 to establish minimum rates and oversee the presently unregulated market segment of longterm contracts. This, the Bureau argued, would ensure the livelihoods of truck drivers and personnel involved in ground transportation.

“The rates regulated by the NTSP represent the earnings of the carrier for the transportation service that they perform in favor of a private entity... In short, the rates guarantee a type of minimum salary/ income that the carrier receives for their services, and this rate is totally unrelated to the income or expenses received or

The study warned that the proposal would cost an immediate loss to society of some $2.4 million annually in terms of a “deadweight loss.”

made by the NTSP or the government of Puerto Rico,” the memo states.

However, a study commissioned by the Retail Trade Association (Acdet by Spanish acronym) to Advantage Business Consulting concluded that incorporating this proposal would cost consumers millions of dollars annually. “The proposal represents the equivalent of a 21 percent tax on trucking services, which represents an additional cost of $45 million a year from households and businesses, and increasing the profits of trucking companies by 549 percent, generating an immediate loss

The NTSP did not carry out a financial analysis of the trucking industry. It is impossible to set up rates that are fair and reasonable unless this type of analysis is conducted.

-Study by Advantage Business Consulting

to society of approximately $2.4 million annually (deadweight loss), and a much larger long-term loss to society as the proposed rates reduce the job creation prospects of the manufacturing and retailing sectors,” the study reads.

Another issue is that the memo does not specify how the metrics will be applied. For instance, it is unclear whether a truck that has to do multiple stops would have the rates applied for each stop or for the total distance. “If all the deliveries are paid using the NTSP proposed rates and San Juan as the starting point, the freight rate increase would be over 40 percent, profits by the truckers would be huge and the NTSP proposal would amount to a tax of close to $100 million a year,” the study explains, adding that “another problem with the proposed rates is that it assumes that every shipment that a truck carries is full. If a shipment is less than a truckload, then the rates become much more costly relative to the quantity and it would be inefficient to transport.”

The NTSP is applying the rates while the Financial Oversight and Management Board

11

/ Wednesday, June 30, 2021

The Broad Front of Puerto Rico Truckers has threatened to go on more strikes if the new rates don’t go in effect. >Carlos Rivera Giusti

(FOMB) issued a letter last April that agreed for the freight rates to remain in place while the entity examines the regulatory framework of the land transport sector, on the condition that truck drivers do not go on strikes that could jeopardize business operations.

Meanwhile, the Broad Front of Puerto Rico Truckers (FAC by its Spanish acronym) denounced that the Oversight Board and some private organizations want this system to be eliminated to create a “monopoly” that would allow them to control transportation costs without considering carriers. As such, its members warned that they would go on strike if the regulations are lifted. “The day that the [FOMB] ratifies that they go against our rate system, the next day we are on the street,” said Edwin Marrero, coordinator of Public Relations for the FAC.

Rising Food Costs

The president of the NTSP, Jaime Lafuente, defended the provisions contained in the memo, noting that the rates for regulated segments hadn’t been revised since 2005, while the proposed 35 percent accounts for inflation. “This does not mean that a 35 percent increase is applied to the cost of food, but to the transport. This represents an increase of half a penny for a three-pound package of rice. The same would happen with a can of soda or beer, where the increase does not reach a penny,” he affirmed.

However, Manuel Reyes, the executive director of the Puerto Rico Chamber of Food Marketing, Industry & Distribution (MIDA by its Spanish acronym), assured THE WEEKLY JOURNAL that the arbitrary imposition of freight rates would indeed affect the prices that consumers pay.

“At the end of the day, the consumer is the one who is going to pay for this. It is not that the merchandise will not arrive; it will simply reach costs that will affect the consumer’s pocket and affect the country’s competitiveness,” Reyes said.

“The only thing supermarkets do is collect the costs of all the previous links in a very long chain.

Each link adds costs that add up and reach the supermarket. The supermarket has to earn a profit

Business leaders affirmed that the rates will result in higher costs for consumers, while the trucker strikes could lead to limited supplies. >Brandon Cruz González

and that is what the consumer pays.” deregulation and free competition, [the NTSP] Moreover, Acdet President Iván Báez, who is suddenly want to intervene,” Reyes affirmed. also the corporate director for Walmart Puerto He underscored that a regulated freight rate Rico, acknowledged that these stores are already system impacts Puerto Rico’s competitiveness experiencing a shortage of certain items, such as and, ultimately, the ease of doing business on the cooking oil, which he partially attributed to the island. truckers’ strikes.

Furthermore, the Certified Fiscal Plan presented Likewise, Reyes added that the rates themselves in April 2021 states as one of its do not necessarily impact food goals the deregulation of freight security, but concurred that the transportation, noting that strikes do have that effect. “What “similar to the impact of federal does put [food security] at risk deregulation, the deregulation of are the threats from these groups land freights in Puerto Rico would The president that have threatened to stop the likely reduce transportation costs of the NTSP, country and stop the distribution for the Puerto Rican business Jaime Lafuente, said of food. That is very dangerous, community and ultimately, for that the rate hike was especially in hurricane season consumers.” challenged before and it should not be allowed - it the Supreme Court, is practically terrorism. They are Bureau Stands its Ground but he emphasized playing with the island’s food Throughout the study, that until there is a security,” he opined.

Advantage underscored that the contrary ruling issued rates proposed by the NTSP are by the judicial body, Call for Deregulation arbitrary and not based on datathe increase prevails.

As local circles discuss adding driven analysis. “The NTSP did more regulations to land freights, not carry out a financial analysis the U.S. mainland has successfully of the trucking industry. It is transformed its transportation impossible to set up rates that services after deregulating the are fair and reasonable unless market in 1980 with the Staggers Rail Act, even this type of analysis is conducted,” the company leading to the development of more eco-conscious wrote. solutions. With this law, the Carter administration Despite this, Lafuente said that the rate hike democratized both air and freight transportation, was challenged before the Supreme Court but effectively allowing the free market to take over. he emphasized that until there is a contrary “Everyone has different circumstances in a ruling issued by the judicial body, the increase market and trying to establish more regulation prevails. “What happens is that the distributors are by the government seems to be contrary to the opposed to recognizing the increase, but because dynamics and what has been learned through this is a country of law and order, the increase is history in free market systems. In the worst going to be enforced in some way,” he stated. moment of public interventionism, the rates of the contract carriers were never regulated, but - Reporters Ileanexis Vera and Génesis Ibarra now that all the systems are moving towards contributed to this story.

In fact,

12

/ Wednesday, June 30, 2021

Beverly Moran

Law Professor at Vanderbilt University

C

What are Tax Havens? Answer Explains Why G-7 Effort to End Them Unlikely to Succeed

lose your eyes and imagine a tax haven.

Does a Caribbean island come to mind? Sand, surf and thousands of post office boxes housing shell corporations?

Some tax havens, like the Cayman Islands or Bermuda, fit that description. Many others do not.

The key to a tax haven is the taxes, not the tan. Any place that allows a taxpayer – whether an individual or a company – to get a lower tax bill overseas than at home is a tax haven.

Thus, depending on the taxpayer’s jurisdiction and business, many places turn out to be tax havens, even the United States.

A recent agreement by the Group of Seven wealthy nations seeks to eliminate corporate tax havens by imposing a global 15% minimum corporate tax rate. However, as a tax

expert, I find the effort hard to take seriously.

Three things that make a tax haven a tax heaven: Put simply, tax havens are jurisdictions that offer low or even no taxes in a bid to attract foreign investment.

From a taxpayer’s perspective, the first sign of a good tax haven is that it’s completely legal. While there may be a perception that people who use tax havens to lower their tax bills are breaking the law, that’s rarely the case.

A taxpayer who is comfortable doing that does not need a tax haven.

Instead, a dishonest accountant and a less honest banker are all that’s required.

The second sign of a good tax haven is transparency, political stability and rule of law. If it costs more in lawyers, accountants and bribes to avoid taxes overseas than it costs to pay the tax at home, there is no point to a tax haven.

The third sign is privacy. For many years, Swiss banks provided the gold standard in that regard by refusing to reveal anything about their depositors to anyone. That changed in 2008, when Swiss banks agreed to report on their depositors to 43 European countries.

The loss of the complete secrecy that Switzerland once provided has made shell companies – and the countries that make them easy to set up – much more attractive. Shell companies are basically companies without active business operations or significant assets that are stacked one on top of the other to make it harder to trace ownership.

In the eye of the beholder

Identifying a tax haven isn’t as simple for the governments intent on controlling them as it is for the taxpayers who seek them out. This is mainly because governments and international organizations tend to

Víctor Rodríguez

Public Affairs Specialist (Puerto Rico and the USVI), Social Security Administration

T

Social Security and Protecting the Elderly from Scams

his month, many communities, seniors, caregivers, governments, organizations and the private sector are uniting to prevent the mistreatment of and violence against older people.

Social Security imposter scams are widespread across the United States.

Scammers use sophisticated tactics to deceive you into providing sensitive information or money. They target everyone – even the elderly – and their tactics continue to evolve.

Most recently, Social Security’s Office of the Inspector General (OIG) has received reports of phone scammers creating fake versions of

the identification badges that most federal employees use to gain access to federal buildings. The scammers may text or email photos of the fake badges to convince potential victims of their legitimacy. These badges use government symbols, words and even names and photos of real people, which are available on government websites or through internet searches.

If you receive a suspicious letter, text, email or call, hang up or do not respond. You should know how to identify when it is really Social Security. We will NEVER: • Text or email images of an employee’s official government identification.

• Suspend your Social Security number.

• Threaten you with arrest or other legal action unless you immediately pay a fine or fee.

• Require payment by retail gift card, wire transfer, internet currency or cash by mail.

• Promise a benefit increase or other assistance in exchange for payment.

• Send official letters or reports containing your personal information via email.

We only send text messages if you have opted in to receive texts from us and only in limited situations, including the following: • When you have subscribed to receive updates and notifications by text.

• As part of our enhanced security when accessing your personal My

think a tax haven is somewhere other than where they live.

For example, the European Union produces an annual list of tax havens that contains no EU member countries, even though many other lists identify Ireland, Luxembourg and a host of other European countries as tax havens.

And while several groups have described the U.S. as a tax haven – Forbes even calls it the best in the world – the U.S. government would never do so, even though it fits all the key criteria, such as providing legal ways to avoid virtually all taxation and strong taxpayer privacy.

The race to the bottom

This is why the G-7 global corporate minimum 15% tax agreement is unlikely to work.

Of course, I applaud the effort.

Without a minimum tax, countries are stuck in a never-ending race to the bottom, whereby every time one government cuts its corporate tax rates, another soon follows with even lower rates.

The problem is the G-7 has to get more than 130 other countries to go along with its minimum tax rate.

Many countries, including Ireland and China, seem unlikely to give up something that has brought them so much economic advantage.

-This article is republished from The Conversation under a Creative Commons license.

Social Security account.

If you owe money to us, we will mail you a letter with payment options and appeal rights.

We encourage you to report suspected Social Security imposter scams — and other Social Security fraud — to the OIG website at oig.ssa. gov. You may read our previous Social Security fraud advisories at oig.ssa.gov/ newsroom/news-release. Please share this information with your friends and family to help spread awareness about Social Security imposter scams.

Due to the COVID-19 pandemic, we could not receive visitors at our field office except for previously arranged appointments on special limited critical situations. However, we continue providing our services by phone and internet. If you have questions on Social Security benefits and services, please access www.socialsecurity.gov.

You can also access our automated services at 1-800-772-1213 or call your local Social Security office Monday to Friday from 9 a.m. to 4 p.m. To locate the telephone number of your local field office, please input your residential zip code at www.ssa.gov/ locator/.

13

/ Wednesday, June 30, 2021

Take Time to Get Lost in a Story

Five book genres for you to enjoy

J

Active Aging

ust as exercising is good for physical health, flexing your mental muscles is vital - especially as you age. Reading daily is a wonderful way to give your brain a workout. It stimulates your imagination, engages your concentration and memory, and allows you to learn something new.

Whether you prefer holding a book, using a tablet or listening to audiobooks, diving into stories you enjoy is relaxing and fun. If you need some suggestions, here are five different genres you might like to try – along with some recommendations.

Mystery and Suspense

Mystery novels often pit a clever sleuth against a wily criminal, and some of the best keep us on the edge of our seats. As an eager armchair detective, getting caught up in a story and putting together the clues triggers your logic and reasoning skills. Everyone loves a page-turner, unexpected plot twists, and surprising outcomes!

Popular classic mysteries include Sir Arthur Conan Doyle’s indelible detective series, Sherlock Holmes, and Agatha Christie’s whodunits like Murder on the Orient Express.

Best-selling author James Patterson is a modern thriller master who dips his fictional pen into many different sub-genre pots. A new release, The President’s Daughter, is co-authored by President Bill Clinton. The gripping political thriller follows a fictional U.S. president on a hunt to find his kidnapped daughter.

If you enjoy some wry comedy and romance in your mystery, check out globally renowned

author Janet Evanovich. Her bumbling, brainy and beautiful bounty hunter Stephanie Plum, always gets tangled up in a crazy caper while she’s trying to apprehend “failure to appear” bond clients.

Fortune and Glory: Tantalizing Twenty-Seven is the latest series installment.

Historical

Historical novels often use actual events like the Civil War, World War II, the New York World’s Fair and the Chicago World Series as backdrops for fictional stories told by a set of fictional characters.

Some of the settings might prompt you to remember important experiences in your own life or the lives of your ancestors.

Pride and Prejudice by Jane Austen is a criticallyacclaimed historical romance novel set in the late 1700s-early 1800s in rural England. To date, it remains one of the most popular novels in English literature.

Ken Follett is one of the most renowned historical fiction writers today, with over 160 million copies of his work sold worldwide. His first novel, Eye of the Needle, is a World War II spy thriller set in 1940 that was made into a movie.

The book made the BBC News 100 Most Influential Novels list in 2019. Many critics deem Follett’s medieval saga Pillars of the Earth as his most epic historical tale.

Romance

Love has a profound impact on our lives. In fiction, the main characters often go to extreme lengths to find it. Well-told tales keep us captivated and waiting for true love to prevail in the end.

World-renowned romance novelist Danielle Steele has sold over one billion copies of her novels to date. Many of her sweeping love stories feature strong, glamorous women seeking or navigating love, relationships or family situations in a myriad of circumstances and locales. The Promise launched her bestselling writing career in 1978, and Finding Ashley is her latest release.

Nicholas Sparks is a consummate romantic storyteller, with many of his novels being adapted into movies for film and television. He was inspired by his wife’s grandparents’ timeless love story in his debut novel-turned-international bestseller and movie The Notebook. To date, he’s written 21 novels, with his most recent The Return published last year.

Classic Literature

Classic literature covers a broad spectrum of American and World novels. These timeless stories cross multiple generations of readers with each new decade. They tell unforgettable tales in vivid settings with magnetic, memorable characters who linger long after the book ends. The classics will arguably be well worth another read – or a must-read if you have the chance.

Popular and beloved titles include The Great Gatsby by F. Scott Fitzgerald, To Kill a Mockingbird

by Harper Lee, Little Women by Louise May Alcott, The Adventures of Huckleberry Finn by Mark Twain, and so many more.

History (Non-Fiction)

If you’re fascinated by or want to learn more about a particular era, event or notable historical person, non-fiction history books offer an abundance of information about important national and global people and events. Reading detailed historical accounts may conjure memories or teach you something new about a given topic.

Notable nonfiction historical titles include A People’s History of the United States by Howard Zinn, Hidden Figures by Margot Lee Shetterly, Seabiscuit: An American Legend by Laura Hillenbrand, and more.

Ultimately, you should let your heart, passions, interests, dreams and curiosity be your reading guide. A trip to the library, your local bookstore or an internet search should turn up stories and authors you can’t wait to read and enjoy!

14

/ Wednesday, June 30, 2021

The Return of Makeup Leaving the pandemic behind

P

The Weekly Journal Staff

uerto Rico and the rest of the United States are continuing to open up. For many people, optimism reigns as we leave the COVID-19 pandemic behind.

Whether it means going out more, returning to the office or going on a much-needed vacation, it means looking our best.

For the tropical Caribbean, it means sunscreen and other accoutrements that are appropriate for the summer. During the pandemic and with the requirements of wearing masks in public, women deleted lipstick from their look and focused more on eye makeup and eyebrows. Today, it means back to sun-kissed skin and natural glows.

Here is what to expect in beauty trends this summer:

Fresh Faced Feel

Puerto Rico and the Caribbean means sunshine and heat. There is no worse feeling than heavy makeup mixing with beads of sweat and creating blotches on the surface of the skin. This summer, try a lighter foundation that barely looks like it’s there at all. Your skin will feel light and be able to breathe in the summer air, all the while looking flawlessly fresh-faced.

Eyes on the Prize

The emphasis of eye makeup during the pandemic is being carried into the summer season. Throughout many lockdowns, we saw

people getting extra creative with eye makeup as they became the main focus of the face due to the wearing of face coverings. Colorful eye shadows, rainbow-hued eyeliner and highlighting the inner corner of the eye will draw only the best attention to the eyes. Yellow is the color for this summer, so add a splash of sunshine to the lids and you’re good to go.

Bold Brows

Since Cara Delevigne, Kylie Jenner and other models took over the fashion world in the 2010s, brows have been growing both in size and demand. The feather brow is having its day, with many makeup brands selling products specifically to plump the eyebrow and add a bushy texture to the fine hair. Although the shape of the brow still

appears to be of importance, the fine line brow in the 2000s is long gone. Think bigger and bushier, the better.

Luscious Lips

Shades of lip pigmentation are on a constant rotation, and sometimes it is hard to keep up with what’s hot and what’s not. One thing for sure this summer is that lip gloss is in. With the rise of more relaxed leisurewear during 2020, due to pandemic lockdowns, beauty trends followed suit. Lip gloss gives your lips an extra plump and shine and can be put over any shade of lipstick, matte or gloss.

Bashful Blush

Blusher has been ditched in the past, with the focus instead on extreme contouring to illuminate cheekbones and jawlines. This summer, however, rosy cheeks are making a comeback. Lightly blushed cheeks give the makeup-free look the perfect touch, giving the face a natural warmth and glow.

Paired with dramatic colorful eyeshadow, big brows, plump lips and flawless skin, the perfect summer look is at the tips of our fingers.

15

/ Wednesday, June 30, 2021

The 2022 Corvette Stingray IMSA GTLM Championship Edition vehicles are driven across the MacArthur Bridge toward the Raceway at Belle Isle in Detroit. >AP/José Juárez

Tommy Milner stands in front of a Corvette C8.R race car, left, and a 2022 Corvette Stingray IMSA GTLM Championship Edition road car. >AP/José Juárez

GM Delivers Affordable Luxury With Corvette Stingray GM will make only 1,000 of the special edition Stingrays

D

The Associated Press

ETROIT (AP) — What would you splurge on if you won the lottery? Most people have a dream car or two on their list, but alas, most people never win the lottery.

General Motors has unveiled a luxury sports car that is competitive with its more exotic (read: expensive) counterparts but isn’t completely out of reach for drivers looking for some flash.

Recently, the 2022 IMSA GTLM Championship Edition Stingray was revealed less than three miles from GM headquarters. MacArthur Bridge was closed briefly so a quartet of mid-engine Corvette C8.R’s could cross the swirling Detroit River and enter the Raceway at Belle Isle.

The cars were piloted by Corvette Racing drivers Jordan Taylor, Tommy Milner, Nick Tandy and Antonio Garcia, who normally would be in France for the 24 Hours of Le Mans race. With Le Mans rescheduled to August, the conflict that had prevented Corvette from competing at Belle Isle had been eliminated and the two-car program were scheduled to race in GM’s backyard for the first time since 2008, hitting the track right after IndyCar’s doubleheader opener.

The Stingray is a supercar with a base price

starting at $62,195. The IMSA GTLM Championship Edition starts at $87,085 for the coupe and $94,085 for the convertible — still a reasonable price point for a car fanatic who wants to own a vehicle that resembles the Corvette C8.R race cars and is in the same class as a more expensive Ferrari or McLaren.

“It’s combining supercars with more attainability,” Harlan Charles, product manager of Chevrolet Corvette, told The Associated Press.

“Not that it’s inexpensive, but it’s to the point where anybody who works can save up and it is attainable someday.

“Only we can do a car like this because Corvette, being an attainable car, we’ve applied that to the mid-engine concept and we’ve made a unique sports car that’s never existed. We’ve taken the portability, the everyday drivability, and we’ve added those exotic mid-engine attributes that are previously only available in these triple-the-price type cars.”

The 2020 Corvette was the first with a midengine in the 67-year history of the car and it gave GM an affordable rival to everything in its class from the Audi R8 to the Lamborghini Aventador.

The special edition available next year pays homage to the 2020 racing season when Corvette Racing swept IMSA’s sports car manufacturers, drivers and team titles.

GM will make only 1,000 of the special edition Stingrays — all in its Bowling Green, Kentucky, assembly plant — partly because it wants the car to be a hot ticket item. The luxury sports car market isn’t flooded with volume but is highly competitive with the most entries of nearly any

category.

“You’re getting everybody’s best shot in the luxury sports car market, the Europeans are in, everybody gives this market their best shot,” Charles said.

The special editions are based on the 3LT trim with Z51 performance package that includes Corvette Racing-themed graphics packages. The exterior content varies by market and includes a high-wing spoiler in carbon flash, yellow brake calipers, black trident design wheels, exterior mirrors in carbon flash, black side rockers and splash guards.

The interior comes with a yellow and gray cabin that continues the exterior racing theme. It has standard GT2 seats, yellow seat belts and a C8.R numbered plaque. Competition sports seats are also an option. GM added three new exterior colors: hypersonic gray, caffeine and amplify orange tintcoat.

The 2022 Stingray’s LT2 6.2 liter V-8 engine will come with an upgraded dual injection fuel system.

GM considers the Stingray a daily driver — the mid-engine has improved traction that makes for an all-weather vehicle — whereas many of its class rivals can sit inside garages as expensive showpieces only brought out for special occasions.

GM is also pitching to a customer base it believes wants luxury from a domestic brand.

“It’s American technology and people are patriotic and almost all of our competitors are European,” said Charles. “This shows we can compete with the best in the world on an American-based car and that’s a real source of pride for us.”

Constant updates online 24/7.

TheWeeklyJournal.com

Visit us for updated content on our 24/7 platform.

WeeklyJournal

The