Monday, October 15, 2018

Puerto Rico oversight board recertifies government’s fiscal plan

By on May 31, 2018

SAN JUAN – The Financial Oversight and Management Board for Puerto Rico announced Thursday that it unanimously recertified the commonwealth’s fiscal plan to reflect “an understanding reached with the Government that will ensure timely implementation of critical structural reforms” and comply with all goals.  

The move comes after the Senate passed legislation that repealed Act 80, the Wrongful Termination Act, but only prospectively for new workers hired by a firm or for newly created businesses. The fiscal board restated that Act 80 should be repealed.

“The Oversight Board reiterates its commitment to the understanding reached with the Governor to reduce the risk of implementation of structural reforms and ensure compliance with the New Fiscal Plan,” fiscal board Chairman José Carrión said in a statement.

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“The fiscal and structural reforms, including the changes proposed by the Governor which are contingent on the approval of legislation by the end of this fiscal year to make Puerto Rico an ‘at-will employment’ jurisdiction [with the repeal of Act 80] for current and new employees, will help return growth to our Island’s economy,” Carrión added.

Key changes to the fiscal plan include the updating of the economic scoring of the revised labor reform package to 0.8% growth, adding 0.15% growth of a newly incorporated Ease of Doing Business reform, strengthening the Nutritional Assistance Program work requirement’s enforcement language, and the adjustment of short- and long-term surplus figures that reflect the modifications, the board said in its announcing release.

The recertified plan amends one of the reinvestment sections to reflect “new investment priorities that minimize implementation risks and push forward economic development,” such as funding for the government’s digital reform, the Central Recovery and Reconstruction Office, a Public-Private Partnership initiative, the Critical Infrastructure Office, and procurement reform, as well as an increased appropriation for the University of Puerto Rico scholarship fund, the release further says. 

As part of an agreement between the island’s government and the board, the  Christmas bonus, and vacation and sick leave days will remain as currently constituted for the public and private sector for the remainder of the recertified fiscal plan, “provided that critical reforms,” such as the repeal of Act 80, energy transformation, and welfare reform are implemented, the board’s statement reminds.  

“The Board has worked closely with the Governor and his staff in recent weeks to ensure the future success of the Island through the new Fiscal Plan,” Carrión said. “Working together, we believe we are putting Puerto Rico on the right path for financial stability now and in the future. That has always been the goal of the Board.  The choices have not always been easy and we have had our disagreements, but we all want to do what is best for Puerto Rico.”

The board’s consent certification and the text of the understanding it reached with the Government of Puerto Rico can be found here.

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