Thursday, January 27, 2022

Puerto Rico Senate approves House’s version of budget without amendments

By on June 25, 2017

Puerto Rico’s Senate approved the island’s budget at about 4 a.m. Sunday, the last day to approve legislation. (Limarys Suárez / CB)

SAN JUAN – Contrary to the Puerto Rico House of Representative’s prediction that the government’s budget bill would go to a conference committee, the Senate approved early Sunday morning the measures that make up the of $9.562 billion spending plan, without any amendments. It is now up to the fiscal oversight board to accept or reject the measures.

In a 21-9 vote at 4 a.m, the Senate approved Joint Resolutions 186, 187, 188 and 189, which make up the budget adopted by the Legislature.

Specifically, House Resolution 186, which originally considered an allocation of $1.3 billion for agencies’ operating expenses, was increased to $7.505 billion.

Meanwhile, House Resolution 187 for special appropriations and for which the executive branch recommended a $5.169 billion allocation, was reduced to $1.666 billion.

The consolidated budget for the next fiscal year totals $25.569 billion, which represents a $109 million decrease compared with the current budget.

“The recommended budget establishes priorities to guarantee services, being careful with the public spending. The decisions we are making are not easy and it will take time to see the results. The contingencies contained in the fiscal plan require the government to comply.

“We must ensure liquidity so as not to affect the salaries of public employees, the health of the people and pensioners. We will adopt a balanced budget that fits the government’s revenue and expenses,” said the Senate Treasury Committee chairwoman, Migdalia Padilla.

Senators from the Popular Democratic Party (PDP) minority, Juan Dalmau of the Puerto Rican Independence Party (PIP) and independent Sen. José Vargas Vidot voted against the budget.

Sen. Eduardo Bhatia, the Popular Democratic Party minority leader, said he voted against because he didn’t know what changes the fiscal board had introduced.

The budget comprises $9.172 million from general fund revenue and $390 million expected from the sale of central government, judiciary and teacher retirement systems’ assets.

To make retirement systems’ payments, the budget allocates $1.315 billion under Office of Management and Budget supervision and another $282.7 million. In total, the budget separates $2.038 billion for the payment of pensions.

The initiatives for the general fund’s $924 million revenue estimate include $519 million from the extension of the 4 percent excise tax on foreign-controlled corporations, $150 million in improved collection and $255 million in adjustments and taxes.

According to the budget, the Legislature will have a $104.8 million allocation, or $45.4 million for the House, $38.8 million for the Senate and $20.5 million for joint activities of the Legislative Services Office and the Capitol Superintendency.

“The work plan that will be developed with the fiscal year 2017-2018 budget will allow us to continue working so we can provide more and better basic services. All government programs will continue to operate with creativity, vision and commitment to deliver quality services at the lowest possible cost,” Chairwoman Padilla said in a Senate release Sunday.

The consolidated revenue budget for the next fiscal year adds up to $25.57 billion, a decrease of $109 million compared with the current budget. When presenting the measures to the upper chamber, the chairwoman said, “65 percent of the agencies’ expenses and operations were met. Together with the executive branch, this process led us to identify measures for new short- and medium-term solutions.”

She also mentioned that the “misguided” decisions that caused the current situation–”a weakened economy and population loss”–led to a decrease in government revenue. Adding that an increase in public spending and carrying out issuances without repayment sources, among other factors, compounded the problem.

“Since the Promesa law was passed, the PIP has expressed that not even one glass of water for the fiscal control board. Since the beginning of this government the board has received water by the bucket. The priority of the board is to comply with the obligations of payment to bondholders,” the Senate’s PIP spokesman said.

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