Draft revised fiscal plans for University of Puerto Rico, Commonwealth published
SAN JUAN – The Financial Oversight and Management Board for Puerto Rico published Monday the draft revised fiscal plans for the commonwealth and the University of Puerto Rico (UPR). The board “will consider” certifying them in its public meeting in San Juan Tuesday, Oct. 23.
The plan for the commonwealth “makes adjustments for new and more reliable data related to both revenues and expenditures for fiscal year 2018, updated population projections, increased federal appropriations and updates in disaster relief funding spending flow, refined healthcare projections based on actuarial estimates, and changes in Government policy that may impact overall economic growth – as well as the settlement recently reached with COFINA [Sales Tax Financing Corp.] bondholders,” the board said, adding it “projects a surplus through fiscal year 2033 and deficits thereafter. The near term surplus requires timely and complete structural reforms, fiscal measures, and increased federal funding.”
The revised plan also projects “a return to long term deficits if substantial additional structural reforms are not undertaken to make the Island’s economy more competitive. The short to medium term surpluses turn once again to deficits after a period during which Federal disaster funding provides a stimulative effect to the economy,” the board said.
However, the oversight panel warned that the plan “clearly outlines that structural reforms, such as labor reform and additional ease of doing business reforms, are all reforms for which political will does not exist today, but which are required to change the long term trend of the Island’s economy, improve competitiveness, attract investment, create jobs, and produce the opportunities needed and desired by the residents of the Island.”
In a statement Monday afternoon, Christian Sobrino, the governor’s representative to the fiscal board, said: “The fiscal team for the Government of Puerto Rico is reviewing in detail the draft fiscal plan published this morning by the Oversight Board. We will be providing the Government’s position regarding the fiscal plan during tomorrow’s public hearing. We recognize that the Oversight Board accepted some of our revisions to the economic projections that reflect a better economic environment. For this reason, we recommended a reduction in austerity measures required by the Oversight Board that still allowed for a fair resolution with our creditors and pensioners.
“This balanced approach provides a true path to long term fiscal health and sustainable agreements with our creditors. This administration has faced a fiscal crisis and two hurricanes without precedent. The actions our government has taken reflect an abundance of will to do what is necessary to transform Puerto Rico. Labeling policy differences as a lack of political will is not prudent and undercuts the foundations of the Title III mediation process. The Government of Puerto Rico is committed to continuing said mediation and open dialogue with stakeholders.”
In the announcing release, Chairman José Carrión said: “Puerto Rico has been mired in economic decline, in part because of fiscal mismanagement, for decades,” and “our government still has much more difficult work to do, even with these changes, for the people of Puerto Rico to be closer to achieving the dynamic and prosperous economy they deserve.”
The board also announced adjustments to the UPR’s fiscal plan “achieved through a collaborative process, including updating for actual lower student enrollment figures, the fiscal impact of measures, revised federal grants revenues,” among other updated information.
A copy of the draft commonwealth and UPR Fiscal Plans can be found on the board’s website, www.oversightboard.pr.gov.