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Puerto Rico curbs public operations

Budget crisis forces closure of schools, government offices

SAN JUAN -- Schools were closed. Building permits were on hold. Renewing a driver's license was impossible.

Many basic functions of Puerto Rico's government were unavailable yesterday as it ran out of money. Officials imposed a partial public-sector shutdown, putting almost 100,000 people, including 40,000 teachers, out of work.

The shutdown, the first in Puerto Rico's history, happened despite last-minute attempts by members of the legislature and Governor Anibal Acevedo Vila to agree on a bailout plan.

Police and other emergency services were not affected, but dozens of public offices were either shut or partially closed. Hundreds of government employees stood in the rain outside the capitol building in San Juan to protest the politicians' failure to avoid the shutdown, and to spur them into resolving the impasse.

''I'm not earning any money and the kids don't have classes," said Sonia Ortiz, a 44-year-old teacher and a single mother of two who attended the protest. ''I have savings, but not enough."

Puerto Rico is saddled with a $740 million budget shortfall because the legislature and the governor have been unable to agree on a spending plan since 2004. Conflicting sales-tax proposals have been floated that would allow the island to secure a line of credit. so it could pay public salaries through the end of the fiscal year on June 30. .

''They have to solve this quickly," said Juan Marrero, a shop owner in a San Juan suburb, whose business was hurt by the closure of a nearby elementary school.

All 1,600 public schools on the island closed yesterday, two weeks before the end of the academic year, along with 43 government agencies. Acevedo blamed ''legislative inaction."

Overnight, the leader of the Senate proposed a 5.9 percent sales tax that he said would raise enough money to pay off an emergency $532 million line of credit.

Leaders in the House of Representatives said they would support only a 4 percent tax. Acevedo insisted that a 7 percent sales tax was necessary, saying that anything less would only postpone the crisis until July 1, when the next fiscal year begins.

Members of the New Progressive Party, which controls the legislature, have blamed Acevedo for the crisis. The two sides never agreed on the 2005 or the 2006 budgets, and the government is using the 2004 budget to operate as debts pile up.

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