SAN JUAN, Puerto Rico – Puerto Rico may be known as "La Isla del Encanto," or the "Island of Enchantment," but it has definitely seen better days.
The island is at a crossroads in its history. Its economy is in flux, with a government that claims it is unable to pay its debt, and it's experiencing a drought that the island has not seen in a quarter century.
More than 50,000 Puerto Ricans come stateside each year in an effort to escape the island's problems.
In early August, the U.S. commonwealth missed a payment on its $72 billion in bonds, a default more than a decade in the making.
The governor has all but waved a white flag, stating that unless creditors come to the table, the money just isn't there to pay them.
The government is the biggest employer on the island, and it owes public workers an estimated $40 billion in unfunded retirement benefits.
"It's not easy working hard to make an honest wage and provide for your family," city worker, Derrick Hernandez, said. "The last few years have been difficult."
How the island climbs out of the abyss is adding to the anxiety. The sales tax stands at 11.5 percent, making it the highest in the U.S. when compared to any state.
Lawmakers also want $674 million in budget cuts and have proposed closing 100 schools and getting rid of 20 agencies.
The governor has called for an exemption from the federal minimum wage and lowering welfare payments. There's also talk of across-the-board tax increases and cuts to pensions.
"We cannot tax our way out of this fiscal situation we are facing," Resident Commissioner Pedro Pierluisi said. "We must grow out of it. In the meantime, we need to cut expenses in government."
Pierluisi is the lone voice Puerto Rico has in Congress -- a seat on Capitol Hill that comes without a vote.
He has called on Congress to allow the government to declare bankruptcy on public utilities that make up a third of the island's debt –a legal route only afforded to states.
"It would allow entities like the power authority, (and) the water and sewer authority to re-organize themselves under the protection of federal bankruptcy courts. It would be an orderly process to handle debt payments," Pierluisi said.
Puerto Rico also has to answer a looming question: should it become a state? In 2012, voters took the first step in saying yes.
Pierluisi said he'll campaign on a referendum for statehood when he takes on governor Alejandro Garcia Padilla next fall.
"Once I become governor, I will be doing that. That's what was done in Hawaii and Alaska before they became states. You want a majority of people saying they want to be admitted to the union," Pierluisi said. "We're losing populations and that hits home because you're talking about relatives, friends and neighbors leaving Puerto Rico for better opportunities, and they can find them overnight in states like Florida."
The next test for the island comes at the end of the month, which is when Garcia Padilla said he hopes to have a fiscal plan in place to restructure the island's debt.
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