In an attempt to prevent more doctors from leaving, and perhaps even pull back the hundreds gone over the last couple years, the new governor of Puerto Rico has included in his first package of bills a measure that is basically a lifesaver for the medical profession on the island.
The measure seeks to lower the fixed income tax rate on all practicing physicians, from the current 33 percent to 4 percent. It also proposes a tax exemption for the first $250,000 earned.
Puerto Rico’s governor Ricardo Rosello, a scientist with no political experience, was sworn in last week.
“Puerto Rico’s recovery begins today,” he said in his inauguration speech.
Over the last 12 years, Puerto Rico lost 2,422 doctors – about 347 doctors per year – according to local newspaper El Nuevo Dia, This has led to a dramatic shortage of health services in the island.
"Perhaps without knowing it or having planned it, we are training professionals to go to other places,” said Jaime Plá, executive president of Puerto Rico’s Hospital Association.
“Puerto Rico is becoming the supplier of professionals, not only in the health area but also in engineering," he said, as quoted by the paper.
Puerto Ricans have been hit with dozens of new taxes in the past four years and increases in utility bills as former Gov. Alejandro Garcia Padilla aimed to generate more revenue for a government he said was running out of money.
Despite those and other measures, the island’s government has defaulted on millions of dollars’ worth of bond payments and declared a state of emergency at several agencies.
Rossello said he also aims to boost public-private partnerships and use that revenue to save a retirement system that faces a $40 billion deficit and is expected to collapse in less than a year.
He pledged to work closely with a federal control board that U.S. Congress created last year to oversee Puerto Rico’s finances, and he has said he supports negotiations with creditors to help restructure a public debt of nearly $70 billion.
The federal control board has requested a revised fiscal plan that has to be approved by end of January, saying that the one Garcia Padilla submitted last year was in part unrealistic and relied too heavily on federal funds -- he refused include austerity measures.
Rossello has said he would request an extension of that deadline as well as an extension of a moratorium that expires in February and currently protects Puerto Rico from lawsuits filed by angered creditors.
The AP contributed to this report.