Sunday, October 22, 2017

Puerto Rico governor: No consideration now for fiscal aspect

By on September 23, 2017

SAN JUAN — As Puerto Rico battles to recover from the direct impact of Hurricane María, the commonwealth’s well-known fiscal crisis is not a priority at this time for Gov. Ricardo Rosselló.

“Our consideration is not fiscal, is restoring the people’s security and normalcy. This is without a doubt, the biggest catastrophe in modern history of Puerto Rico,” said the governor on Saturday, after he updated on the damages and recovery efforts underway following the passage of Hurricane María.

As the commonwealth grapples with a cash crunch—amid the oversight of a financial control board and a massive court bankruptcy process—the Puerto Rico governor warned that the government “basically won’t receive revenues” during the next month.

On Thursday, the fiscal board created by the federal Promesa law authorized the reassignment of up to $1 billion in funds under the current budget. For Gov. Rosselló, this amount won’t be enough to tackle the commonwealth’s financial needs related to the recovery efforts from Hurricane María.

“[The board] gives us the flexibility of $1 billion to address the emergency. That is a resource we have, but we will solicit more,” the governor said.

At the federal government level, Gov. Rosselló announced Puerto Rico will solicit “waivers and mechanisms” in Washington, D.C., to help the island get back on its feet. For instance, congresswoman Nydia Velázquez (D-N.Y.), stated on Friday she will push for a one-year exemption to the Jones Act on the island.

“The panorama after Hurricane Irma and Hurricane María changed. Whoever does not understand that is simply not in tune with reality. This will be the new model and paradigm that we will implement,” said the governor, who emphasized the federal government must help U.S. citizens in Puerto Rico.

Billions in damages expected

Although an estimate of damages is still unknown, Gov. Rosselló pointed to the economic impact of Hurricane Georges, the last storm that had a direct hit on the island, back in 1998.

“To give you a sense, Georges was about a $7 billion to $8 billion impact. So you can certainly start thinking of numbers way north of that. We’ll see how it goes,” he said.

The governor further explained the government is being “prudent” in not disclosing figures on estimated damages, as it seeks to avoid these turn to be wrong down the road.

Grim picture for towns

Only a few months after municipalities saw more than $150 million in subsidies cut from the central government budget, they now face an even tougher fiscal outlook as towns try to take on recovery efforts after Hurricane María.

Nevertheless, Gov. Rosselló assured that all mayors will be able to retain professional services as needed, as they will be reimbursed by either the federal or local government.

“Seek the private sector, if needed, to solve the emergency. You will be reimbursed and we will work on it afterward,” the governor said.

Rolando Ortiz, mayor of Cayey and president of the Mayors Association, recognized the passage of Hurricane Maria presents yet another challenge for towns, from a fiscal perspective.

“The investment made by municipalities in this process of recovery will put the fiscal situation in a precarious condition because in order to receive the reimbursement, the municipality has to pay first,” Ortiz said.

Yet, the mayor said that as it has happened with other issues, “Hurricane María has united Puerto Rico,” and he is confident a solution will be worked between municipal government and the Gov. Rosselló administration.

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