Friday, August 12, 2022

FOMB to Impose Own Budget

By on July 1, 2022

Legislative Leaders Quarrel Over Failure to Meet Deadline

Puerto Rico’s Financial Oversight and Management Board (FOMB) was expected this week to certify its fiscal year 2023 commonwealth budget proposal after the island’s Legislative Assembly failed to pass its own version of the budget by Monday’s midnight deadline set by the fiscal panel.

The oversight board’s commonwealth budget proposal of $12.43 billion—$100 million less than the version submitted by Gov. Pedro Pierluisi—would take effect starting on Friday, July 1.

Section 202 of the federal Puerto Rico Oversight, Management, and Economic Stability Act (Promesa), which created the financial oversight board to negotiate with creditors on behalf of the commonwealth, mandates the Puerto Rico Legislative Assembly to pass a “compliant budget” and submit it to the FOMB before the start of the fiscal year. Otherwise, the oversight board’s proposal will be “deemed approved” and the panel would issue a fiscal plan compliance certification, entering into “full force and effect” at the start of the fiscal year on July 1.

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