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Fiscal Oversight Board sets rules for FY 2018 budget

By on March 25, 2017

SAN JUAN — The Fiscal Oversight & Management Board detailed to Gov. Ricardo Rosselló Nevares and House and Senate presidents Carlos “Johnny” Méndez and Thomas Rivera Schatz, respectively, the calendar with which the government must present the budget for fiscal year 2018, which must include a liquidity plan that contains measures to generate $200 million additional savings to the treasury.

According to the March 22 letter, obtained by Caribbean Business, the Puerto Rican government must present the budget and liquidity plan by March 22.

Fiscal Oversight & Management Board (Juan J. Rodríguez/CB)

Fiscal Oversight & Management Board (Juan J. Rodríguez/CB)

The first limit date established by the Board is May 8, by which the fiscal entity must approve the governor’s proposed budget, or notify violations. If there are violation notifications the board will issue “necessary corrective actions.”

On May 22 the board will approve the budget and the Legislature must abide by it. “If the Oversight Board notified the Governor of violations, the Governor may submit a revised budget to the Oversight Board on or before May 23, 2017,” it stated.

On May 31 the Legislature must “timely” submit the adopted budget and the board will approve or notify violations. The fiscal organism will provide descriptions of all necessary corrective actions as well.

“If the Governor timely submitted a revised budget, the Oversight Board shall approve it or submit to the Governor and Legislature its own revised, compliant budget,” the letter reads.

The calendar established by the board decrees that by June 7 the Legislature must submit a revised budget, and that day the entity will issue a compliance certification to the governor and the Legislative branch.

“If the Legislature did not submit a timely, revised, compliant budget, and continues to fail to do so through June 30, 2017, the Oversight Board shall submit its own compliant budget to the Governor and Legislature on July 1, 2017 and that budget… If the Oversight Board submitted the Governor’s or its own budget to the Legislature on or before May 31, 2017, the Legislature shall submit to the Oversight Board the budget it adopts.

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The next date in the calendar is June 14, by which the Legislature must present the adopted budget and the board will either approve it or notify violations with descriptions of necessary corrective actions.

On June 21 the board will approve the Legislature’s adopted budget and issue a compliance certification for the governor and the Legislature. On June 30 the Legislative branch will issue the revised budget and the fiscal entity will approve it and offer a compliance certification.

The letter establishes that in any given moment prior to June 30, 2017, the governor, the Legislature and the board must certify that the budget they developed together reflects consensus, and this budget will be used for FY 2018.

“Pursuant to [the Puerto Rico Oversight, Management & Economic Stability Act] PROMESA § 202(b), the Oversight Board provides the forecast of revenues for the period covered by the budget that is attached hereto as Appendix A, for use by the Governor in developing the Budget,” states the letter, signed by the board chairman José Carrión III.

Read the Board’s letter here

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