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Fiscal Board certifies Puerto Rico budget with changes

By on June 30, 2017

SAN JUAN – The fiscal control board put an end to the uncertainty surrounding the next government budget when on Friday it certified, with some last-minute changes, the spending plan during its eighth public meeting, the fourth held on the island. This is the first budget certified under the board’s reins, and now includes $13 million in additional cuts to the Legislature.

It also certified—on the condition that their updated fiscal plans be submitted within 45 days—the budgets for the Government Development Bank (GDB), the Highways & Transportation Authority (HTA), the Electric Power Authority (Prepa), and the Aqueduct & Sewer Authority (Prasa). The board warned these could be changed according to the final fiscal plans of these entities.

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The new budgets will take effect Saturday, July 1, when the new fiscal year begins. The government representative to the board, Elías Sánchez, said Gov. Ricardo Rosselló will not sign the budget’s four legislative measures, as required by the Constitution of Puerto Rico because the federal Promesa law stipulates that certification of the document puts it in force.

“In a colony, yes [it is possible that a budget comes into force without the governor’s signature]. The Promesa law states that if the board fully accepts the budget, it then proceeds. If not, the board amends and certifies and is as if approved,” Sánchez said at the conclusion of the meeting, which, as is customary, was held amid strict security measures.

The meeting, which began shortly after 8:30 a.m. in a Convention Center District hotel, included all board members. Four of them were present in San Juan but Carlos García, Arthur González and José Ramón González participated via teleconference.

$13 million less for the Legislature

To certify the budget, the fiscal board had requested $319 million in corrective actions Tuesday, of which $119 million were additional reductions in government spending. The board also asked for more evidence on how the government would achieve $200 million in estimated savings for the next fiscal year.

Of the $119 million, the agreement between the board and the government was to return $50 million in reserves under the control of the board and to leave $24 million in hands of various agencies—such as the Government Ethics Office, the Comptroller’s Office, and the Justice Department—whose allocations had been underestimated “by mistake,” Sánchez explained.

An additional $24.1 million in special appropriations were cut. The board had initially requested $25 million. It was agreed that Puerto Rican Culture Institute programs would each be reduced by 13 percent.

Despite government disagreement, the board imposed an additional $13 million cut for the Legislature, which initially was $16 million, leaving the Legislative Assembly $24 million less for next fiscal year.

“We wanted the reduction to be similar to the other branches [of government],” board Chairman José Carrión said about the cuts in the legislative branch. He added that the cut was based on the Legislature’s spending during the past five years, not just taking the last fiscal year as the benchmark, as legislative leaders intended, he added.

Sánchez confirmed that the cut to the Legislature was the “only” difference with the board, so “we are very pleased that the governor’s budget has been accepted.”

“This year’s budget is a great achievement. We must congratulate the government on what has been achieved. That does not mean that we are happy about everything,” Carrión said at a press conference, in which he was emphatic that more than 90 percent of the budget, with $800 million in spending reductions, complies with the certified fiscal plan.

The amended budget will be posted on the Office of Management and Budget’s (OGP) website, Sánchez said.

—Reporter Cindy Burgos contributed to this article.

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