Fiscal board sues Puerto Rico government over furlough
SAN JUAN – Puerto Rico’s fiscal control board has sued Gov. Ricardo Rosselló to force the government to implement a furlough program and cuts pensions, as established in the certified tax plan.
Specifically, the legal action filed by the board Monday seeks that federal Judge Laura Taylor Swain declare that both the workday and pension reform cuts requested by the oversight body are “mandatory parts” of the fiscal plan approved by the entity in March.
“The Governor must enforce and comply with all aspects of the Commonwealth Fiscal Plan, including but not limited to the furlough program and the pension overhaul. The FOMB also seeks injunctive relief prohibiting the Governor from continuing to refuse to comply with any aspect of the Commonwealth Fiscal Plan, including the furlough program and pension overhaul,” the lawsuit reads.
As first reported by Caribbean Business, in the face of strong opposition from the government, the fiscal control board announced Aug. 4 its decision to request the government cut two working days a month for all public employees, except the police, starting Sept. 1 and preliminarily until the end of this fiscal year, in June 2018. The measure would affect nearly 130,000 public workers.
“Fiscal reform is a difficult but necessary process for Puerto Rico and the credibility of the plan lies in its enforcement. While our preference was to avoid this step, we believe it is a necessary measure to keep Puerto Rico on track with its commitments to reduce spending and build stable foundations for its economic future,” Natalie Jaresko, the executive director of the oversight board, said in a release.
“On March 13, the Board certified the Commonwealth’s Fiscal Plan to achieve nearly $40 billion in long-term deficit reduction by increasing revenues and right-sizing the public sector, while beginning the hard work of restructuring the Island’s unsustainable $74 billion debt owed to creditors. The plan included clear and specific milestones to be closely monitored by the Board,” Jaresko continued.
“Puerto Rico’s financial situation did not deteriorate overnight, and fixing it is going to be difficult, but we have the tools to do it. We will continue to work with the Puerto Rican government to execute the certified Fiscal Plan that achieves financial sustainability and improves the economic fortunes of the Puerto Rican people,” Jaresko concluded.