Puerto Rico prepares to vote on statehood

Alan Gomez | USA TODAY

Puerto Ricans will head to the polls Sunday to determine whether they want to convert their U.S. territory into a state. Even if they vote for statehood, Congress seems unlikely to add a 51st star to the U.S. flag anytime soon.

The referendum fulfills a campaign promise made by Puerto Rico Gov. Ricardo Rosselló, who believes the financial benefit of full statehood would help solve the island's economic woes. The island is drowning under $74 billion in debts and $49 billion in pension liabilities, which forced Congress to create an oversight board that filed a form of bankruptcy protection for Puerto Rico in May.

Rosselló is pushing hard for the vote, even signing a measure this week that authorizes him to choose two senators and five representatives and send them to Washington to demand statehood, a strategy Tennessee employed to join the union in the 18th century.

“Our colonial status is unsustainable and has contributed to the current fiscal and economic crisis,” Rosselló said.

But few believe Congress would go along even if Puerto Ricans overwhelmingly vote for statehood.

Edwin Meléndez, director of the Center for Puerto Rican Studies at Hunter College in New York, said becoming a state would lead to a massive transfer of money from Washington to San Juan.

While Puerto Ricans are exempt from the U.S. federal income tax, they still pay Social Security and Medicare taxes but receive less federal funding than people living in U.S. states. Statehood would change that dramatically.

A 2010 Government Accountability Office report found that the federal government would need to pay up to $12 billion a year in government services to the new state while only getting $2.3 billion back in income tax. That $2.3 billion would probably be far lower now, Meléndez said, because of the island's spiraling finances, its high unemployment and a population exodus to the U.S. mainland that has further shrunken Puerto Rico's tax base.

"That would be your narrative for statehood, and the conservative sector of Congress would torpedo this right and left," he said.

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Puerto Rico's chances for winning statehood are further complicated by Rosselló's decision to push for the vote despite warnings from Washington. Congress required the Justice Department to certify the questions posed on any statehood ballot. That's partly because the last three statehood votes in Puerto Rico were highly disputed, with voters leaving nearly 500,000 ballots blank during the last attempt in 2012.

Sunday's ballot will present three options: statehood, free association/independence or the current territorial status. A Justice spokesperson said the department had not approved the language, meaning many in Washington may simply ignore Sunday's results.

Federico de Jesús, a Washington-based consultant who used to work for the governor of Puerto Rico, said Sunday's vote was a waste of time and resources.

"At a time of fiscal crisis, we're spending $8 million on an exercise in futility that Congress has already said they're not going to address because we didn't follow the rules they set up," said de Jesús, who was born and raised in Puerto Rico.

None of that has stopped Rosselló from pushing forward with his referendum.

He and others on the island blame Washington for many of its economic problems. For example, Congress created a tax break in the 1970s that allowed U.S. businesses to expand their operations to Puerto Rico without having to pay taxes on their profits there. Pharmaceutical giants such as Pfizer, Merck, Bristol-Myers Squibb and Eli Lilly responded by building plants there.

But Congress ended that tax break in 2006 as the Great Recession began, which prompted many of those businesses to abandon the island. Supporters of statehood say that reliance on Washington needs to end.

“It’s clear we need to change our course toward a new future,” said Puerto Rico Sen. Carmelo Rios, a member of the governor’s party. “Puerto Rico is at its most critical point in its modern history, where its political-economic model has collapsed, society is in a crisis, the government cannot sustain itself, and we have seen with much pain how our people leave us in search of a better chance of quality of life.”

Contributing: The Associated Press