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Puerto Rico governor confident he will prevail against fiscal board over furlough

By on August 28, 2017

SAN JUAN – Gov. Ricardo Rosselló said Monday he was confident he would prevail over the fiscal control board in the appeal filed by the body created by the federal law Promesa to impose a two workday a month cut for public employees of the executive branch, except the police.

The governor insisted that the furlough program is a recommendation and “is not necessary at this time,” since liquidity expectations have been met. He also argued that a measure like this would have a “negative” impact on the economy, government revenue and the thousands of workers to whom it would apply.

Fiscal board court sues Puerto Rico government over furlough

In a legal appeal filed earlier Monday before federal Judge Laura Taylor Swain, who leads the renegotiation of Puerto Rico’s debt under Title III of Promesa, the board requests it be declared that both the furlough and a 10 percent cut to public pensions are “mandatory parts” of the fiscal plan, not recommendations as the government claims. Thus, seeking to enforce the cuts.

“The [Promesa] law says very clearly what a recommendation is, the governor will have the space to answer. We have evaluated it, we have evidence, we were able to demonstrate it is not necessary [to implement the furlough], and we feel confident” that the government will prevail against the board, the governor said during a press conference in La Fortaleza, his office and residence.

His reaction to the lawsuit came just after he declared that his representative to the board, Christian Sobrino, continued discussions with the entity to avoid imposing the furlough program.

Puerto Rico government to fight furlough in court

In fact, the governor confirmed that the government requested the board grant it more time to evaluate the need to implement a furlough, at least until until the end of the fiscal quarter on Oct. 31. That way, there would be more information as to whether the government was meeting estimated revenues and and complying with the cuts established in the fiscal plan.

“There is ongoing dialogue to see how we work with fiscal measures that comply with the fiscal plan,” Rosselló said before it was reported that the board had sued the government to impose the furlough.

After hearing about the legal action, the governor alleged that “everyone anticipated that. Not a big surprise. We understand that we have a strong lawful argument where through [Article] 205 [of Promesa] we are executing the entire fiscal plan, and the workday reductions was a recommendation added as an amendment in the fiscal plan.”

Article 205 provides the process by which the board makes “recommendations on financial stability and management responsibility.” It emphasizes that the entity can make recommendations “at any time” on various issues, especially fiscal ones, and that the government and the Legislature could adopt them by submitting an implementation plan or reject them.

When refusing to carry out a board recommendation, “the Governor or the Legislature shall include in [a] statement explanations for the rejection of the recommendations, and the Governor or the Legislature shall submit such statement of explanations to the President and Congress.” The governor has already sent that response to the aforementioned recipients.

“I do not oppose the reduction of working hours as a philosophical war. It is for the pragmatic reason that it is not necessary at this time; we have met the objectives that had been established that had to be fulfilled, which were liquidity objectives, but we are ready to look for other alternatives to fulfill [sic] measures that reach the fiscal objectives,” the governor stressed.

Rosselló maintained that on Sept. 1, when the furlough was due to take effect, public employees will have a normal workday.

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