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Gov. Rosselló says measures were adjusted but fiscal plan wasn’t amended

By on March 11, 2017

 SAN JUAN – Gov. Ricardo Rosselló said Saturday afternoon that he presented the fiscal control board additional measures to avoid its “proposed 20 percent reduction in public servants’ salaries,” but did not make the substantive changes requested by the body created by federal law. The new measures were not revealed.

The board had given the government administration until 9 a.m. Saturday to amend the fiscal plan that Promesa requires of the government of Puerto Rico to balance the budget, restructure the public debt and return to the markets.

Estimating a larger fiscal gap, the board called for more cuts, while extending the period by which it expects to see a balanced budget by three years.

In a press release, the governor said his administration’s strategy is “to prevent affecting the most vulnerable and to operate a fiscally responsible government, guaranteeing essential services to the citizens.” It also says there is ongoing dialogue between the government and the board’s financial advisers.

Gov. Ricardo Rosselló (Juan J. Rodríguez/CB)

Gov. Ricardo Rosselló (Juan J. Rodríguez/CB)

The announcement follows a meeting Saturday morning between the governor, Senate President Thomas Rivera Schatz, House Speaker Carlos “Johnny” Méndez, Secretary of State Luis Rivera Marín and Resident Commissioner Jenniffer González, who participated over the phone from Washington, D.C.

During the meeting, the release adds, the governor told the legislative leaders that the fiscal board has acknowledged the need to revise its economic projections and “temper them to the current reality of Puerto Rico.”

It also says the governor insisted that the adjustments to the healthcare section of the fiscal plan presented Feb. 28 are in accordance with his commitment to guarantee access to health services for the most vulnerable.

“Likewise, the collection projections were discussed with the commitment to identify an additional $262 million, as requested by the [board],” the statement reads.

In a letter sent to the governor Thursday, board Chairman José Carrión III expressed concern over a lack of evidence supporting the government’s spending and revenue projections, calling them “too optimistic.” This includes the government’s estimate of minus-1.6 economic growth for fiscal year 2017 and the impact of many of the proposed fiscal measures. He also pointed out that central government spending could be underestimated.

As for the cost of the healthcare system, he expressed doubts about how the government will achieve the reductions in spending projected in this area, which are less than the $1 billion recommended by the board earlier this year. It also believes it is not the right time to increase public health plan coverage – as Rosselló suggests – and required the government to set a cap on the benefits received each month. The board said this will help reduce the number of visits to the hospital and the cost of medications.

The governor reiterated once again his commitment to keep the dialogue between the government and the board’s financial advisers open with the objective of avoiding the imposition of measures that limit the provision of essential services and affect the quality of life of Puerto Rico residents.

“The next hours are of vital importance in the defense of the people of Puerto Rico. My commitment to the people who chose us is to comply with a fiscally responsible and efficient government in the provision of services to its citizens. The Fiscal Plan that we have presented to the Financial Oversight and Management Board fulfills these purposes. We trust that prudence and wisdom prevail in this process,” the governor said.

The statement adds that the legislative leaders support the governor’s strategy.

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