Puerto Rico Report, 03/12/14

White House Report Shows Puerto Rico Losing Billions by Not Being a State
Posted on March 12, 2014

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A new analysis by President Obama’s Office of Management and Budget shows that territory status, often misleadingly called “Commonwealth,” is costing Puerto Rico billions of dollars in Federal programs a year.

The document sent to Congress this week in support of Obama’s proposed budget for the fiscal year that begins October 1st reports on State and insular area funding in more than 30 Federal programs.
Puerto Rico is projected to receive $3.589 billion under the programs, .68% of the total. The territory has about 1.14% of the national population. It gets a lower percentage of program dollars because territories can be — and are — treated worse than States in many programs.

Because States — but not territories — with low income levels get more funds in some programs, Puerto Rico would receive more than 1.14% of the total as a State.

White House funding estimates for the programs that do provide more funds in territories as well as in States with low income levels shows that equal treatment for Puerto Rico would be much more.
The numbers released this week also make clear that the Commonwealth is totally denied funding under some programs.

The presidential analysis does not include many Federal programs, including some of the biggest. It does not, for example, cover most State and territory funding under the Supplemental Nutrition Assistance Program. As a State, Puerto Rico would receive up to $700 million a year more under the program.

The budget document also does not cover programs providing direct benefits to individuals or payment for services to them, such as Medicare, medical care for the elderly and disabled, and Supplemental Security Income, aid to the needy aged and disabled. The programs would provide as much as $1.5 billion and $1.8 billion more in Puerto Rico respectively if Puerto Ricans were treated equally with residents of the States.

Puerto Ricans voted by wide margins to end territory status and transition to statehood in a plebiscite under local law in November 2012. The White House hailed the results but later convinced the Congress to provide for a plebiscite under U.S. Justice Department auspices because a governor and majorities in each house of Puerto Rico’s legislature from the territory’s “Commonwealth” party very narrowly elected at the time of the plebiscite refused to accept the voters’ self-determination decisions.

Additionally, 130 members of the U.S. House of Representatives and two U.S. senators have sponsored legislation to require the president to submit statehood transition legislation if Puerto Ricans vote for statehood again. The legislation would pledge the Congress to pass a transition bill.

Programs covered by the White House analysis in which the Commonwealth receives no funding include Child Care and Development Mandatory and Matching Grants. Connecticut, the State with the population closest to Puerto Rico’s — just 19,006 less than the territory’s 3,615,086 in the U.S. Census Bureau’s July 1, 2013 estimate, is budgeted to receive $18,738,000 in Mandatory Grants and $25,058,000 in Matching Grants. This would be 1.47% and 1.05% of those programs respectively.

Puerto Rico is, however, eligible for Child Care and Development Block Grants. It would receive $33,664,000 in Federal Fiscal Year 2015, $540,000 more than this fiscal year and 1.29% of the program.
The Commonwealth will also receive no funding to operate a health care insurance subsidy (“Exchange”) program. $154,166,667 a year was authorized for it by the Federal government’s 2010 healthcare programs reform law but equal treatment with the States would require $1 billion a year more. Because of the gross inadequacy of funding, the insular government is using the $154 million a year for its Medicaid program, which pays for health care for low-income individuals.

Even with this and with the 2010 law’s tripling of Federal contributions to the Commonwealth’s Medicaid program, Puerto Rico is treated worse in Medicaid than in any program covered by the analysis in which the territory receives funding. The estimated $1,075,697,000 is only .32% of the national program. The increase from $1,030,029,000 this fiscal year is less than half of what Puerto Rico would receive as a State.

The Commonwealth is also very poorly treated in the Temporary Assistance for Needy Families (TANF), Foster Care, and Adoption Assistance programs. It receives just $71,047,000 a year for all. Connecticut is slated to receive $266,788,000 for TANF in Fiscal Year 2015, $56,725,000 in Foster Care, and $40,365,000 in Adoption Assistance.

The Commonwealth fares only a little better in the Low Income Home Energy Assistance program. The White House analysis says that the President’s budget would enable it to receive $11,344,000, .41% of program funding, a decrease from $15,281,000 this year.

The Commonwealth is similarly discriminated against in the Social Services Block Grant program. The $8,793,000 for it in the budget is only .52% of national funding, although it would be an increase from $8,160,000 this year.

Puerto Rico is also slated to get very small amounts in the major Federal transportation infrastructure programs. The Obama budget plans for its Transit Formula Grants to decrease from $132,849,000 this year to $50,991,000 next year, .47% of the program.

Commonwealth treatment in the highway construction program is worse. Even though the budget estimates an increase for Puerto Rico to $143,550,000 from $137,185,000, that is just .34% of the program.
Airport Improvement Program funding would decrease from $15,214,000 to $13,814,000, .48% of national funding.

Puerto Rico’s State-like funding in some major housing and education programs and another nutrition program demonstrate what statehood could mean for the territory in programs in which the Commonwealth is discriminated against. The $251,279,000 Puerto Rico would get in the Women, Infants, and Children food program, an increase from $246,457,000, is 3.57% of the program.

The education programs are Title I assistance for schools in low-income communities, Head Start, Vocational Rehabilitation, and Effective Teachers.
• Title I funding is budgeted to drop from $434,566,000 to $417,397,000 — and from $453,904,000 in Federal Fiscal Year 2013 — because of the decrease in Puerto Rico’s population but the 2015 amount would be 2.9% of the national program.
• Head Start funding is budgeted to go up to $285,870,000 from $281,646,000, for 3.22% of total funding.
• Grants for the Effective Teachers program, which replaces the Improving Teacher Quality program, would drop from $70,651,000 to $54,522,000 but the lower amount is 3.08% of national funding.
• Vocational Rehabilitation funding would rise to $73,791,000 from $69,640,000, 2.21% of the program.

State-like treatment benefits Puerto Rico most on a relative basis in public housing programs. $107,454,000 for public housing construction would be slightly less than this year’s $108,097,000 but is 5.9% of the program. $215,990,000 to operate public housing units would be up from $211,798,000 and would be 4.82% of the program.

The territory’s Community Development Block Grant program funding is proposed to decrease from $63,380,000 to $58,844,000 but that is 2.02% of the program.

The President’s Office of Management and Budget report also provided the following program numbers. The table shows this year’s funding, the expected amount for next year, and the percentage of national funding that next year’s amount would be.
Program 2014 funding 2015 funding % of national
School Breakfast $36052000 $37911000 .97%
School Lunch $133997000 $136253000 1.17%
Child and Adult Care Food $28133000 $29047000 .92%
Special Education $115008000 $115008000 .99%
Children’s Health Insurance $140979000 $149820000 1.44%
Child Support Enforcement $30530000 $28653000 .73%
Housing Choice Vouchers $198418000 $200164000 1.01%
Clean Water construction $18472000 $12866000 1.27%
Drinking Water construction $8845000 $7350000 .97%
Schools and Libraries Internet $24360000 $29584000 1.27%

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