Gov’t FY 2016 Budget now $9.3B; Audited Statements may be Released by end of Month
SAN JUAN – The Puerto Rico government budget for fiscal year 2016, which ends June 30, has been adjusted, from $9.8 billion to $9.27 billion, mainly as a result of lower than expected revenue entering the commonwealth coffers, Office of Management & Budget Director Luis Cruz told reporters at La Fortaleza on Wednesday.
What’s more, the OMB chief said the commonwealth’s audited financial statements for fiscal year 2014, which ended June 30, 2014, could be finally released within the next few weeks, as the process being conducted by KPMG enters the final stretch.
“[The audited statements] should be ready by the end of this month; first week of February,” Cruz said, while echoing previous comments made by other officials pointing at the additional extraordinary processes undertaken by the independent auditors, given Puerto Rico’s fiscal crisis, as the reason for the delay in its release. The commonwealth’s audited financial statements for fiscal year 2014 were due in May 2015, and the government has previously missed self-imposed deadlines to release it.
Meanwhile, the revised budget translates into roughly $250 million in additional, across-the-board government spending cuts, including such areas as healthcare, security, social wellbeing and education. The $250 million figure also includes a $119 million adjustment in debt service under the budget, mainly as a result of the administration’s recent decision to default on certain Infrastructure Financing Authority (Prifa) bonds.
Cruz stressed the budgetary cuts are being made without affecting essential services to citizens, while ensuring government employees continue to receive their paychecks. “In a surgical manner, we are adjusting the budget…affecting in the least possible way and ensuring essential services to citizens. At the same time, we also want to ensure government payroll is met each pay period, as well as the least impact on the economy. Those are the judgment elements in making this decision,” Cruz explained.
The Alejandro García Padilla administration has run the gamut of lifeline fiscal measures, including delaying payments to government suppliers and refunds to Puerto Rico taxpayers, in a bid to stabilize its cash flow and keep operations afloat.
More than $1 billion in debt-service payments across the commonwealth’s several issuers are due before the end of the fiscal year. With the kickoff of fiscal 2017, more than $1.5 billion in payments are due July 1. Puerto Rico’s total public debt towers at roughly $70 billion, without taking into consideration about $40 billion in liabilities under its severely underfunded pension funds.