Storm of money woes hitting P.R.

PUERTO RICO’S struggling government warned on Tuesday that it will face a cash shortfall by the end of the year and will seek billions of dollars in additional federal funds to help it cope with the expenses caused by Hurricane Maria.

Officials said the devastating storm imposed enormous emergency costs while causing an estimated 50% drop in the U.S. territory’s collections of taxes and fees, worsening an 11-year recession.

“The severity of the storm dislocated the island’s economy,” said Gerardo Portela, executive director of Puerto Rico’s Fiscal Agency and Financial Advisory Authority. “The lack of electric power has further deepened the crisis.”

Portela said it was not yet clear how much it will cost to rebuild Puerto Rico, but he said the island suffered an estimated $45 billion to $95 billion in damage.

So far, Congress has approved nearly $5 billion in aid to the island. Tens of thousands of people have left Puerto Rico, thousands of businesses remain closed and the island’s power company is generating only 30 % of its normal output.

In addition, some 20% of people remain without water.

Puerto Rico’s government said it will see an estimated reduction of $1.7 billion in cash as a result of reduced collections, with an additional estimated $1.18 billion reduction in power and water income, with those two agencies currently running on cash reserves.