Puerto Rico's FY 2023 revenues were 12.8% above projections

Puerto Rico’s fiscal 2023 general fund revenues came in 12.8% above the Puerto Rico Oversight Board’s original projections but were off from fiscal 2022.

The Puerto Rico Treasury Department announced Friday revenues were $12.57 billion in the fiscal year ended June 30. This was down 1.6% from fiscal 2022, which saw $12.77 billion collected.

Puerto Rico Secretary of the Treasury Francisco Parés Alicea said income exceeded expenditures in fiscal 2023.

The board’s revised projection for fiscal 2023 revenues, released on April 3 — $12.89 billion — was 0.9% higher than collections.

“However, as we anticipated, we ended the fiscal year with a balanced budget where income exceeds disbursements, complying with all current obligations and the payment of the government’s debt, which affirms adequate management of public finances,” said Secretary of the Treasury Francisco Parés Alicea.

Heidi Calero, president of the Heidi Calero Consulting Group, said, the figures suggest Oversight Board “forecasts are unreliable and they never attempt to explain their ‘black box’ models that the Puerto Rican taxpayer has paid for and would like some accountability [for].”

In response, Puerto Rico Oversight Board Spokesman Matthias Rieker said, “The Oversight Board succeeded in stabilizing a bankrupt government, ending decades of overpromising and overspending. Puerto Rico’s severe fiscal crisis turned into a durable recovery. The Oversight Board continues to ensure that the root causes of Puerto Rico’s past distress are fully addressed and rectified.”

The tax categories with the biggest collections were corporate income ($2.954 billion), individual income ($2.883 billion), sales and use tax ($2.778 billion), “other” ($1.379 billion), and taxes on offshore corporations ($742 million).

The category with the biggest decline in revenues was the tax on offshore corporations, most or all based in the United States, which dropped because the Law 154 excise tax on these corporations expired in February.

Puerto Rico’s government replaced the excise tax with Law 52-2022.

Law 154 income had historically been substantially higher in the period February to July.

Treasury expects income from Law 52 to be even throughout the year, bringing in the same total revenue as the old tax on an annual basis.

Treasury believes the general fund lost a significant amount of money in fiscal 2023 but should be OK in the long run.