Puerto Rico Voters Reject Statehood : Election: Supporters of continued commonwealth status are the victors in close contest. Island’s governor says struggle to join Union will go on.

In support of the status quo, Puerto Ricans voted by a narrow margin Sunday to remain a U.S. commonwealth, crushing the hopes of popular Gov. Pedro J. Rossello and his backers that the Caribbean island could enter the Union as the 51st state by 1996.

“The people spoke and I will obey,” Rossello said Sunday afternoon in a concession speech to a throng of supporters in San Juan. But he added: “This is a struggle that will go on.”

With all precincts reporting, the official results showed commonwealth status receiving 48.4% of the vote, statehood with 46.2% and independence with 4.4%.

Election officials said 73.6% of Puerto Rico’s 2.3 million registered voters turned out to cast their ballots on the emotional issue, which mixed ethnic pride, history and economics.

Although the margin of victory for remaining a commonwealth was less than 3 percentage points, pro-commonwealth Popular Democratic Party leader Miguel Hernandez Agosto called the vote “a clear repudiation of statehood.”

The vote in the non-binding plebiscite was expected to be close, but after months of festive--and at times raucous--campaigning, statehood proponents said they liked their chances to win a plurality, if not a majority, for the first time in Puerto Rico’s history.

If statehood had won, Rossello had promised to petition the U.S. Congress to make Puerto Rico a state. He also planned a $50-million promotional blitz designed to convince U.S. politicians and the rest of America that the island of 3.6 million people deserved the 51st star.

Calling Puerto Rico the oldest colony in the world, Rossello had urged a vote for statehood as a way to end what he called a shameful era of second-class citizenship.

“I hope by the election of 1996 (that) we’re choosing our U.S. congressmen and senators,” he said two weeks ago.

But votes for a commonwealth, the official status in Puerto Rico for 41 years, prevailed--although by a far narrower margin than in 1967, the last time a plebiscite on the question was held.

Commonwealth status pulled 60% of the vote in that contest, while 39% of voters chose statehood. Independence was favored by fewer than 1% of voters that year.

Puerto Rico, a densely populated island some 1,000 miles southeast of Miami, has been a U.S. territory since 1898 and a commonwealth since 1952. Under that status, Puerto Ricans are U.S. citizens but pay no federal income tax, cannot vote in presidential elections and have no voting representatives in Congress.

Statehood would change all that, and Rossello and the New Progressive Party argued that the time for change was now. “It’s not time for any more discussion or rhetoric,” the popular 49-year-old pediatric surgeon said in a final statehood rally Saturday night. “For me, it’s time for action.”

But the leaders of the PDP, routed in the election that put Rossello in the governor’s office last November, insisted that the island’s unique partnership with the United States provides Puerto Ricans with the best of both worlds.

The PDP’s campaign played upon the fear of many that statehood would eventually dilute the Latino heritage that Puerto Ricans treasure, and even do away with Spanish as the island’s predominant language.

Although independence came in a distant third, some saw light there too.

“We are the only party that has really grown,” said Maria Cecelia Benitez, an independence supporter monitoring the voting results at party headquarters in San Juan on Sunday afternoon. “The other parties were more interested in spreading fear about the other party than for their own position. It was a very intense campaign.”

According to some analysts, what went largely unaddressed in the campaign’s bombast and colorful rallies were the critical economic issues than many voters were most concerned about.

Although the standard of living in Puerto Rico is high by Caribbean standards, the per capita annual income is only $6,600, less than half that of Mississippi, the poorest of the 50 states. Four out of 10 Puerto Ricans receive food stamps, and more than 60% of the population benefits from some form of federal assistance.

Observers such as San Juan Star columnist Alex Maldonado argued that statehood was not only economically untenable for Puerto Rico, but that Congress would never go for it.

Not only did many voters fear that statehood would mean higher personal taxes--Puerto Ricans now pay a commonwealth tax on income--but they also worried that the loss of a special business-tax exemption would undermine the $34-billion gross domestic product.

Under the U.S. Internal Revenue Code, the large pharmaceutical, textile and chemical companies that are the mainstay of the island’s economy pay no taxes on profits.

Commonwealth supporters also emphasized that becoming a state would probably mean Puerto Rico would lose its right to an Olympic team and its entry in the Miss Universe pageant, won this year by Puerto Rican Dayanara Torres.

In Old San Juan, commonwealth supporters crowded into the narrow cobblestone streets, and traffic was reported jammed for miles Sunday night.

“I was quite surprised. This was an extraordinary rejection of statehood,” Maldonado said. “The polls showed statehood and commonwealth even, but there were a lot of undecideds, and I thought it would be closer.”

With a massive advertising campaign, which included pro-statehood endorsements from former presidents Ronald Reagan, George Bush and Gerald R. Ford, Rossello and the NPP’s chances for victory could hardly have been better, Maldonado said. “They have no excuses,” he said.

From a private celebration of PDP leaders in San Jose, Jose Roberto Martinez, the pro-commonwealth party’s general counsel in Washington, said the election results “put an end to this talk of statehood for a while.”

Martinez added that the defeat could eventually jeopardize Rossello’s position as NPP leader. “They spent at least $5 million to $6 million on this and got rejected,” he said. “That was quite risky for the governor after just 10 months in office.”

Among the 22 million Latino residents of the mainland United States are 2.6 million Puerto Ricans. Status votes were held last month in several communities with large Puerto Rican populations, such as New York, and commonwealth status prevailed by an even wider margin.