Puerto Rico's Mysterious Public Sector
As Congress considers assisting Puerto Rico through its current fiscal crisis, taxpayers have a legitimate interest in knowing how much government employees on the island are being paid. Unfortunately, we have found that public-sector salary and benefit data is one of the commonwealth's numerous financial secrets.
Understanding Puerto Rico's fiscal situation has been a challenge for citizens, bond investors, and oversight agencies. While all U.S. states released their audited financial statements for the 2014 fiscal year long ago, we are still awaiting the commonwealth's audited financials some 21 months after the fiscal year ended. Congressional leaders are so irritated with the delay that they have made the release of audited financial statements a prerequisite for debt relief under the proposed Puerto Rico Oversight, Management, and Economic Stability Act (PROMESA).
Fortunately, Puerto Rico's 78 municipios — which are roughly equivalent to U.S. counties — have been more prompt in filing their financial reports. Our group, ABRE Puerto Rico, has collected financial statements for all of the island's municipios and displays them, together with financial-health rankings, on a new website.
We recently attempted to include detailed information on salaries for municipal employees. Our goal was to provide the level of information available in California, New York, and other states.
In California, the state controller publishes anonymized public-employee salary data online. The site began as a reaction to revelations from the Los Angeles suburb of Bell, where the city manager was receiving close to $800,000 annually.
A private website, Transparent California, goes even further by supplying employee names. Local media frequently reference Transparent California when calling out instances of excessive public employee pay. The site, conceived by the not-for-profit California Policy Center, receives a very large number of daily page views, testimony to its value to both journalists and the general public.
Despite excellent relationships with a number of the agencies responsible for collecting and disseminating government financial information, we have been unable to collect detailed public payroll data like that available on the mainland. Puerto Rico's Office of Government Ethics voluntarily provides a financial summary for some elected officials; however, it provides broad ranges in a non-standardized manner.
Utilizing other resources such as the Annual Register of Government Posts and the Registry of Occupied Positions, it is possible to calculate an average salary for each municipio by dividing its total payroll by its total number of employees. However, this tells us nothing about the distribution of government salaries, which is important for any decisionmaking regarding the use of our limited public resources.
Puerto Rico's government agencies have raised taxes and service fees while delaying payments to vendors. Last August, the commonwealth began defaulting on some of its more junior bond obligations, and it is threatening to default on more senior bonds later this year. It has also sought protections similar to those afforded to municipalities in the 50 states under Chapter 9 of the bankruptcy code.
Before asking more from taxpayers, bondholders, and vendors, the governments of Puerto Rico should muster the political will to provide detailed information about their finances. Public pay transparency is an important step in this direction.
Alvin Quinones is the co-founder of the Center for Integrity in Public Policy in Puerto Rico, which operates ABRE Puerto Rico. Marc Joffe is president of the Center for Municipal Finance, which provides technical support for ABRE's transparency work.