Puerto Ricans to Return to Work, School After Government Shutdown

SAN JUAN, Puerto Rico – More than 100,000 Puerto Ricans will head back to their government jobs and public schools will reopen next week after politicians announced an end to a budget crisis that partially shut down the government of the U.S. island territory.

The agreement announced late Wednesday called for an emergency loan — backed by the island's first sales tax — to cover a $740 million budget deficit. The accord, reached by a special binding commission, did not specify the amount of the new levy and left other key issues up to legislative approval.

Thousands of Puerto Ricans stood outside the Capitol on Thursday, pressuring lawmakers to follow through on their pledge to back the commission's recommended solution. Some expressed concern that Pedro Rossello, a former governor and the leader of the opposition New Progressive Party, had warned that lawmakers weren't obligated to abide by the agreement.

"They're talking about an agreement but this march demonstrates that we don't trust the politicians," said Victor Villalba, president of one of the largest public-sector employee unions.

Rossello issued a statement later supporting the commission's recommendation, but saying he believed the sales tax should be as low as possible, around 4 percent, and that he opposes the use of loans to solve the island's structural budget imbalance.

"We accept the recommendation as a stopgap measure so there is no excuse to get workers back on the job and end this lockout," Rossello said.

Inside the domed Capitol, lawmakers began consideration of measures to finance a loan to cover government expenses for the remainder of the fiscal year, which ends June 30, and to solve the long-term budget crisis.

Under the agreement, government workers can resume working on Monday — and receive pay for the days they missed since the shutdown began on May 1, allowing life to gradually return to normal on the Caribbean island.

A half-million students will return to class on Monday when the nearly 1,600 public schools that closed on May 1 reopen.

Anxiety turned to relief Thursday for public sector employees. Hours before the agreement was announced, Jose Vazquez Gonzalez sat on a beach near the Capitol with his wife and two children — wondering when he could go back to work. He and other government workers struggled to pay bills while the governor and opposition-dominated legislature bickered over how to erase the budget deficit.

"I never thought it would come to this," Vazquez, 33, said of the shutdown. "I never thought I would be unemployed."

The shutdown has rippled through Puerto Rico's economy, with hotels, shops and restaurants reporting a drop in business as thousands of government workers tried to get by on unemployment benefits of up to $133 per week.

"People are not buying anything," said Angela de Jesus, a San Juan jewelry store manager, who said her few customers avoided high-priced items and bought only trinkets.

Jaime Massanet, 77, a butcher in San Juan's Plaza Mercado food market, said his business was down by half during the shutdown.

"It's an ugly and serious situation," Massanet said. "All Puerto Rican society is in anguish."

During the shutdown, families chipped in to help jobless relatives, cut back on spending or looked for other jobs.

Wilhelm Sack, president of the 500-member Hotel and Tourism Association, said 20 percent of reservations were canceled during the shutdown, apparently because of travelers' fears the shutdown would affect their vacation or business trips to the island.

"This is already having an effect of the image of Puerto Rico," he said.