Rosselló Proposes Increasing the Minimum Wage in his State of the Commonwealth Speech
SAN JUAN – At a time when Puerto Rico is going through one of its worst economic crises and the Fiscal Oversight & Management Board awaits the government’s fiscal plan to address the situation, Gov. Ricardo Rosselló promised in his first “State of the Commonwealth” message Tuesday to increase the minimum wage, both for the public and private sectors.
As he outlined the “differences” between his administration and the federal board established by Promesa, the governor affirmed that his fiscal plan will not affect essential services, healthcare or pensions.
Neither will it contain layoffs, although public employees’ vacations will be “leveled” with those of the private sector, but government spending will be reduced by $1.6 billion as will the government structure, by 74%, which means the elimination of 96 agencies in a five-year period, so the public sector remains with only 35 entities. This will be possible through public-private partnerships and the provision of services by nonprofit entities.
With protests outside the Capitol of protesters opposing the administration’s public policy, Rossello stated that health services will not receive a $1 billion cut as proposed by the board, which he called “unacceptable.”
Instead, he proposed a “new” healthcare system that is more “personalized” and “patient-centered,” in which citizens can “choose the provider or insurer” under open competition and regions at the patient’s convenience. With this “new system,” administrative spending will be reduced and fraud will be detected, which will leave savings of up to $ 550 million, without considering the government’s income in federal funds.
“The measures proposed by the fiscal oversight board are framed within strictly financial equations. On the other hand, our public policy is framed in compliance with the fiscal objectives, but also in promoting economic development, in our capacity to restore credibility, in which change doesn’t translate to cuts, but into long-term benefits,” said the governor, who stopped at one point in his message because of problems with the teleprompter. He dealt with the issue humorously and said that even if he stumbled, he would continue with strength.
As for pensions, the governor said he will not cut 10% of retirees’ pensions as proposed by the board, but will reform retirement systems so “those who have more…contribute more. The most vulnerable, they will not feel any impact.” Rosselló said that he will introduce legislation so the police can contribute to Social Security “without an impact on their paycheck,” something that will also be evaluated in the case of teachers.
Retirement systems are supposed to receive an injection of money through private-public alliances, for which there will be a summit in April “where at least 25 opportunities for infrastructure development necessary to create jobs will be analyzed.”
The governor announced the presentation this year of an education reform, which will improve the quality of education, reduce bureaucracy, give more autonomy to schools, and include more integration of the community and parents, who are will be allowed “to choose where their children study”.
This will be achieved through “municipalization of schools, collaboration with the third sector and with teachers’ cooperatives to run schools,” he said.
The fiscal plan will also include the elimination of numerous existing tax incentives, as well as municipal subsidies –which represent $750 million– for which he promised to recover part of that revenue through legislated regional consortia and delegating government services to city halls..
Likewise, the fiscal plan includes some $200 million in cuts for the University of Puerto Rico (UPR), apart from some $50 million to $100 million in revenue for the university system, which will arrive via government contracts. Rosselló said he was open to “collaboration and dialogue” with the different sectors of the UPR, “respecting university autonomy.”
After listing approved laws and executive orders, the governor also spoke of the differences between his and the past administration, and assured his was recuperating the markets’ trust and complying with its responsibilities, although he did not make reference to the audit of or the restructuring of the public debt – which will be done jointly with the board and after the fiscal plan is certified.
He also announced that on Wednesday will begin the payment of $15 million in reimbursements to individuals, payments that during the last administration were delayed for months.
“I am pleased to say that with very different proposals, we have reached the target increase in revenue of $1.5 billion, and we are projecting a more positive economic growth than the estimates of the board … I am not here to create false expectations. I’m here to talk to you with the truth. We have to make big changes here. Puerto Rico cannot bear this any longer,” the governor said during his hour-and-a-half message.
Rosselló ended his speech referring to the June 11 status plebiscite, which will “decide whether the crisis is perpetuated or whether we choose to demand equal rights that correspond to us as citizens of the United States of America,” after which those present gave a standing ovation while chanting: “equality, equality, equality.”
Among those present were former Govs. Pedro Rosselló—the governor’s father—and Carlos Romero Barceló. Also attending were the Supreme Court judges, including Chief Justice Maite Oronoz; as well as the presidents of the mayors’ Federation and Association\, Carlos Molina and Rolando Ortiz, respectively.