Monday, July 16, 2018

Puerto Rico gov’t challenges fiscal board’s budget in court

By on July 5, 2018

SAN JUAN – In a statement issued by his office, La Fortaleza, Puerto Rican Gov. Ricardo Rosselló announced Thursday that “the Government of Puerto Rico” was asking the court to “defend” the budget approved by the island’s legislature, which he signed, and decide whether it or the budget certified by the island’s fiscal oversight board should be implemented.

In its statement hours after the governor’s announcement, the fiscal board said it “will vigorously defend against any suit attempting to thwart the carrying out of the Budget and Fiscal Plan.”

The legislature refused to turn Puerto Rico into an at-will jurisdiction by repealing Act 80, the law on unjustified worker dismissals, as part of an agreement the panel had reached with the governor to not require that vacation and sick leave be halved and the year-end part of worker salaries not be mandatory.

In the lawsuit filed Thursday, an injunction and a summary judgment is sought to stop the board from imposing its $8.76 billion budget, which contains the worker benefits and other funding cuts. He accused the board of trying to dictate public policy.



“We will ask the court to clarify that all the components of public policy and administration that the Fiscal Oversight Board has placed in the Fiscal Plan and the Budget are merely recommendations as established by the PROMESA Law,” Rosselló said, adding, “we will request a declaratory judgment and an injunction on the board’s attempts to usurp the power of the local government to…home rule, since the budget of the board includes some components of control and administrative public policy that go beyond their powers.”

In a Radio Isla interview Thursday morning, Rosselló said: “The board wants to renegotiate the terms of the debt, but the truth here is we have to have a balance of what is best for Puerto Rico and that is why today I am going to be filing a lawsuit before the federal court on several matters against the Fiscal Control Board.”

He added that the Office of Management and Budget has been instructed to operate with the government’s version of the budget.

“I already signed a budget, that of the Legislative Assembly, but I am presenting this before the judge saying: I have two budgets before me. I signed the one by the Legislative Assembly. These are the considerations to do it. We are requesting an ‘injunction’ so that this budget can be carried out, and if not, declare which budget” must be used,” the governor said.

The fiscal board certified its own budget for the government over the weekend, contending that the legislature’s budget was not compliant with the commonwealth’s fiscal plan. The governor convened a special session, in part, to repeal Act 80 but the legislature again defeated the measure.

“The agreement reached with the Board would have ensured a lot of what we submit to a court today with the costs and uncertainties created by a lawsuit,” the governor said.

Promesa, the federal law that established the board, gives it the power to impose a budget and make cuts to different areas except for the debt. Board Executive Director Natalie Jaresko has said the budget is a “living document” that can be modified.

–Cybernews contributed to this report.

Puerto Rico fiscal board doesn’t rule out legal action to enforce compliant budget

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