Puerto Rico Says Revenue Gains Larger Than Revised Forecastby
General-fund revenue through April totals $7.95 billion
Commonwealth revenues expected to meet fiscal 2016 targets
Puerto Rico, in the midst of seeking a restructuring of its debt, said revenue collections from July through April came in $46 million above revised estimates and that island officials anticipate meeting lowered revenue goals for the fiscal year ending June 30.
General-fund revenue rose 2.9 percent to $7.95 billion through April from the year-earlier period, according to a statement Monday from the Treasury Department. That is still $238.5 million below initial forecasts, which were cut in November. The commonwealth’s revised budget for the fiscal year ending June 30 is about $9.3 billion.
“It doesn’t change anything,” said Matthew Dalton, chief executive officer of Rye Brook, New York-based Belle Haven Investments, which oversees $4.2 billion of municipal bonds. “Great, they’re going to hit their numbers, but the numbers that they’re guiding with don’t carry the debt.”
Governor Alejandro Garcia Padilla has warned the commonwealth is unable to pay its July general-obligation bill and fund essential services. Puerto Rico and its agencies owe a total $2 billion of principal and interest on July 1. The governor is seeking to reduce a $70 billion debt load by negotiating with bondholders to take losses on their investments through voluntary debt exchanges. The island’s economy is expected to shrink by 2 percent in fiscal 2017, which would be the fifth consecutive year of economic decline.
Corporate-tax collections were $66.8 million more than budgeted estimates. General fund sales-tax receipts totaled $1.16 billion, about $28 million above projections. Tax revenue from foreign manufacturers came in at $1.49 billion for the period, or $24.6 million below estimates.
The Treasury Department anticipates actual revenue collections will meet budgeted projections for the fiscal year ending June 30 because April collections came in $76.2 million higher than budgeted estimates.
“Based on revenue behavior up to April, estimates included in the revised $9.29 billion budget for fiscal year 2016 are expected to be met,” Treasury Secretary Juan Zaragoza said in the statement. Zaragoza in November 2015 revised fiscal 2016 revenue estimates down by about $500 million.