Wednesday, July 8, 2020

Oversight Board Delineates Fiscal 2020 Budget Process; Issues Revenue Forecasts

By on January 30, 2019

The executive director of the fiscal control board, Natalie Jaresko. (Juan J. Rodríguez / CB)

SAN JUAN – The federally established Financial Oversight and Management Board for Puerto Rico provided Wednesday revenue forecasts for the commonwealth government to use when developing the budget for fiscal year 2020.

The fiscal board also called for additional adjustments to certain “core agency appropriations to reflect non-recurring expenditures and improve transparency,” a release by the board reads, adding that “these savings can be reinvested in Public Safety and Public Education.”

In a letter to Gov. Ricardo Rosselló, the board established the General Fund Revenue forecast for fiscal 2020 at $8.03 billion and the “Other Funds” revenue forecast at $2.54 billion.

The oversight panel also requested additional budget adjustments including the “removal of certain appropriations where the Board has insufficient visibility to ensure compliance with the Fiscal Plan, such as certain expenditures related to marketing and professional services,” according to the release.

It also called for changes to “ensure alignment” with the fiscal plan for “uniform healthcare measures, to include additional benchmark-based reductions for the Legislative Assembly, to apply standard executive branch right-sizing targets to the State Elections Commission, as well as to reflect the privatization of WIPR by the end of the third quarter of the fiscal year,” among others.

“To the extent the government applies these additional refinements and they produce savings beyond certified Fiscal Plan levels, the Oversight Board will look to reinvest these funds in high priority areas, such as public safety and education. Sound budget practices and fiscal responsibility will allow for prioritizing spending where it is most needed at the time,” the board’s executive director, Natalie Jaresko, said.

According to the letter, the reinvestments would go toward payroll increases for police, teachers and school directors, firefighters, and the directorate of the Institute of Forensic Sciences. They would also look to provide nonpayroll increases for the Firefighters Bureau for the purchase of vehicles and equipment, and for Forensic Sciences Institute to increase the capacity of its morgue through capital investments.

In the letter, the board listed a series of agency payroll and operating expenditure parameters, as well as additional guidelines that must be followed for the government’s fiscal 2020 budget submission, the deadline for which is March 22.

“During the past two years the budget process has matured and we have been able to work more efficiently with Governor Rosselló and his executive team. The requests for additional information and specificity will provide all parties greater insight into the budget and should guarantee an even more efficient approval process moving forward,” Jaresko said.

The board issued its directives pursuant to Section 202 (b) of the Puerto Rico Oversight, Management and Economic Stability Act (Promesa), which requires the panel to submit a forecast of revenues to the governor and legislature for use in developing the annual budget.

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