Oversight board discussess fiscal plan, accreditation with University of Puerto Rico 

(Screen capture of http://www.uprrp.edu)

Faces deadlines to submit proposed plan, order to show cause for academic accreditation

SAN JUAN – With a deadline of only a little more than two weeks for the University of Puerto Rico (UPR) to submit a proposed new fiscal plan, Natalie Jaresko, the executive director of the island’s Financial Oversight and Management Board, met Friday with the academic institution’s president, Jorge Haddock.

The meeting took place as the UPR’s internal committees hold working sessions to produce the fiscal plan, and touched upon its implementation, as well as financial reporting, utilization of scholarship funds and concerns over the UPR’s non-compliance status with the Middle States Commission on Higher Education (MSCHE), for which Jaresko said her panel was committed to helping the UPR maintain its accreditation.

They also discussed the UPR’s financial and academic competitiveness compared with local, stateside and international institutions, according to the release.

“As Puerto Rico’s main academic institution, UPR plays an essential role for Puerto Rico’s society and economy,” Jaresko said. “It is crucial for this accomplished university and its students that it maintains its accreditation and continues to offer the same quality education it always has,” she said, adding that “Higher education is a key to Puerto Rico’s stability and prosperity.”

The UPR’s 11 campuses are on show cause for lack of compliance with the Requirements of Affiliation 11 and 14, which address financial planning and documentation, and access to information, respectively. The UPR is also in non-compliance with the Standard of Accreditation VI, which pertains to financial resources.

While the requirements refer to apparent internal issues regarding long-term financial planning, as well as not submitting financial statements on time, for the Standard of Accreditation VI the Middle States is questioning the ability of the UPR to have enough resources to fulfill its mission, given the budget cuts it has experienced and the ones expected in the fiscal plan approved Oct. 23, which drops its central government allocation from about $650 million for fiscal year 2019 to $441 million for fiscal 2023.

In the Jan. 10 letters in which the accreditation agency notified the 11 campuses they were being placed on show cause, the Middle States requested, among other documents, for “updated information on the impact of the Fiscal Oversight Management Board’s plan and proposed restructuring on the institution’s status and finances.”

With regard to the fiscal plan, which the UPR must submit by April 5, with the expectation of having it certified by May 1, the board and the school discussed the scholarships that are part of the current plan, under which undergraduate tuition was raised in June to $115 per credit, from $57, but the scholarships, which were supposed to be awarded at the same time, have yet to be issued.

The fiscal board stated Friday that the “Certified Fiscal Plan requires UPR to create a needs-based scholarship program this year with $9 million, growing to $16 million by fiscal year 2023. An additional $35 million for independently managed need-based scholarships has been budgeted in the Commonwealth’s Certified Fiscal Plan for the current fiscal year, aiming to ensure that no student is left behind.”

Puerto Rico’s new draft fiscal plan banks on reforms, federal recovery funding

Debt service postponed; includes measures to attract business, stem outmigration

SAN JUAN – The Puerto Rico government submitted yet another revised fiscal for the bankrupt island. It does not include debt service payments over the next five years, despite a surplus of $12 billion, bolstered by stimulus from federal disaster recovery funds and the implementation of fiscal measures and structural reforms.

The document, which was submitted to the island’s Financial Oversight and Management Board for certification, is dated March 10 and is the sixth version of draft and final versions produced since January 2018. It is also the first revision to the fiscal plan since the government restructured the debt of the now-shuttered Government Development Bank and the Puerto Rico Sales Tax Financing Corp.’s (Cofina by its Spanish acronym) $17 billion debt.

The debt adjustment plan for Cofina went into effect Feb. 12. It granted Cofina ownership of 53.6% of the island’s sales tax and the commonwealth 46.3%. Cofina’s portion will be used to fund debt-service payments on new Cofina bonds distributed under the plan.

Before the measures and structural reforms, the government projects a surplus through fiscal year 2024, in part from revenue stemming from the massive disaster relief funding, totaling $77.6 billion, from diverse sources slated to be received between fiscal years 2018 and 2032.

These sources include $45.8 billion in federal public assistance, about $15 billion in Community Development Block Grant (CDBG) program funds between fiscal years 2020 and 2025; $2.5 billion in Federal Emergency Management Agency (FEMA) individual assistance that ends next year; $8 billion from private insurance claim payments; and $5 billion in other federal funding.

The stimulus brought about by the injection of federal funds will come about in multiple forms such as construction companies hiring unemployed local workers and from an influx of stateside workers spending money for food and lodging on the island. The revised fiscal plan projects $81 billion in disaster relief funding will be disbursed for reconstruction efforts.

Federal funding drop

Over the long term, however, the baseline forecast is not sustainable as federal disaster relief slows down, supplemental Medicaid funding phases out, Act 154 companies and non-resident withholding revenue declines, and pension and healthcare expenditures rise. Fiscal measures and structural reforms help produce a cumulative surplus through 2024. Structural reforms will drive a 1.21% growth and fiscal measures are expected to result in $7.5 billion in savings.

As in previous fiscal plans, the revised plan expects the island’s population to drop from the current 3.1 million to about 2.9 million in fiscal 2024.

Among the structural reforms the plan says can drive growth into the economy are the Earned Income Tax Credit; work requirements established for the nutritional assistance program; education initiatives established by the Workforce Innovation and Opportunity Act; improving of “the ease of Doing Business”; and fewer occupational licensing requirements to foster a more open market.

In addition, the government will move its processes online through its Unified Information System, as well as improve the ease of registering property and paying taxes. It also will deregulate the so-called Condominium Law to attract investment by rental residents and increase the population.

In addition to the structural reforms, the government says it is implementing fiscal measures to reduce costs and improve the quality of services. These include the creation of the chief financial officer position to oversee island resources; consolidating agencies; healthcare reform; and tax reform that includes compliance and fee enhancement initiatives to generate $574 million in revenue.

An addition to the revised fiscal plan is an expense for proceedings under Title III of the Puerto Rico Oversight, Management and Economic Stability Act (Promesa), the bankruptcy-like process that a federal judge is overseeing for Puerto Rico’s $70 billion debt. To date, related expenses have surpassed $300 million.

See the fiscal plan here.

Oversight board publishes fiscal plan, budget timeline for utilities, highway authority, University of Puerto Rico

(CB file)

SAN JUAN – The Financial Oversight and Management Board for Puerto Rico announced Monday the timeline for fiscal plan revisions and fiscal year 2020 budgets for the Puerto Rico Electric Power Authority (Prepa), the Puerto Rico Aqueduct and Sewer Authority (Prasa), the Highways and Transportation Authority (HTA), and the University of Puerto Rico (UPR).

The following timeline “includes the process for the development, presentation, approval, and certification of those fiscal plans and budgets,” the board said in its release.

Prepa, HTA, and UPR dates:

  • April 5: Entities submit draft of Fiscal Plan to the Oversight Board.
  • May 1: Oversight Board sends Notice of Violation for draft of Fiscal Plan, if necessary.
  • May 10: Oversight Board sends revenue expectations for fiscal year 2020 budget.
  • May 14: Entities submit revised draft of the Fiscal Plan to the Oversight Board.
  • May 22: Entities submit draft fiscal year 2020 budget.
  • May 28: Oversight Board expects to certify the Fiscal Plan.
  • May 31: Oversight Board sends Notice of Violation for draft of fiscal year 2020 budget, if necessary.
  • June 14: Entities submit revised draft budget for fiscal year 2020.
  • June 28: Oversight Board expects to certify fiscal year 2020 budget.

Prasa dates (“depend on Prepa Fiscal Plan input”):

  • April 5: Entity submits draft of Fiscal Plan to the Oversight Board.
  • May 1: Oversight Board sends Notice of Violation for draft Fiscal Plan, if necessary.
  • May 10: Oversight Board sends revenue expectations for fiscal year 2020 budget.
  • May 22: Entity submits fiscal year 2020 budget draft.
  • June 3: Entity submits revised draft of the Fiscal Plan to the Oversight Board.
  • June 7: Oversight Board expects to certify the Fiscal Plan.
  • June 10: Oversight Board sends Notice of Violation for draft of fiscal year budget 2020, if necessary.
  • June 17: Entity submits revised draft budget for fiscal year 2020.
  • June 28: Oversight Board expects to certify fiscal year budget 2020.

The letters sent by board Executive Directo Natalie Jaresko apprising Gov. Ricardo Rosselló of the requirements follows:

Swain’s World: First Circuit Ruling Delays P.R.’s GO Debt-Adjustment Plan

Editor’s note: The following originally appeared in the Feb. 28 – March 6, 2019, issue of Caribbean Business.

What are the implications of the ruling by the First Circuit Court of Appeals on the Government of Puerto Rico’s Title III case? It will not only delay a debt-adjustment plan for the commonwealth’s $16 billion general-obligation (GO) debt but may also lead to a new and conservative Financial Oversight & Management Board that could even decide to file a dismissal of the island’s bankruptcy petition.

Those were just some of the scenarios presented by lawyers during the Third Promesa Forum that discussed the repercussions of the Boston court ruling that declared the Oversight Board was unconstitutional because its members were not appointed as established by the Appointments Clause of the U.S. Constitution, which empowers the president to nominate officials for appointment with the advice and consent of the Senate. The First Circuit Court of Appeals upheld the federal law Promesa, the Puerto Rico Oversight, Management & Economic Stability Act, and the bankruptcy cases but allowed for a period of 90 days to rectify the problems with the board’s appointments.

Oversight Board members were not appointed by former President Obama but were chosen from various lists produced by the majority and minority parties in Congress.

Zachary H. Smith, a partner & chair of bankruptcy and restructuring at Moore & Van Allen PLLC, said the Appeals Court first looked at the Territorial Clause, which gives Congress plenary powers over incorporated and unincorporated territories, and tried to square that authority with the Appointments Clause to conclude that the appointment of the Oversight Board members still requires the advice and consent of the Senate.

The court also looked at whether board members were federal or territorial officers. Although Promesa says the board is an entity within the territorial government, “the court looked past those labels” to conclude they were federal officers operating under a federal law. It also looked at the relationship between the commonwealth and the Oversight Board. “The commonwealth cannot overrule the board. It has the power to approve budgets…the power to put covered entities under Title III [of bankruptcy]. The court really did not have much difficulty concluding that members of the board were federal officers,” he said.

The court also evaluated who has the power to terminate board members and whether they are inferior or principal officers. “They answer directly to the President,” he said.

What happens now? John Mudd, a bankruptcy lawyer, said the Oversight Board has 90 days to ask the U.S. Supreme Court to revise the Appeals Court ruling. However, he noted that the Supreme Court only sees 80 out of 10,000 petitions. One of the options is for President Trump to appoint a new board so it can be confirmed by the Republican-dominated Senate. The new board will remain in place until 2022. “The board will probably not be very deferential to the commonwealth. It could be more conservative…. It could even go and say, ‘I don’t think we need Title III,’ and dismiss it for cause…. A new board may also decide to overturn any decision made by the previous board. It can say we should not pay pensions,” he said.

The 90 days given by the Appeals Court to validate the Oversight Board are slated to expire May 16, but in the meantime, it can continue to operate as it has done so far. The current board must approve a new commonwealth fiscal plan in April.

What happens after May 16 when the 90 days are up? “They can continue to act, but since they do not exist, they can’t do anything,” Mudd said.

If the District Court sees no movement in the case after some period, the judge may dismiss it.

How will the decision impact the commonwealth’s restructuring of its debt? Both Mudd and Smith said the ruling delays the debt adjustment plan. Smith noted there cannot be a debt-adjustment plan until there is a decision regarding a request from the board’s Special Claims Committee and the Unsecured Creditors Committee to repeal $6 billion in GO debt because it violates the Constitution’s balanced budget clause and the limitations on the level of the debt. “There is another pleading asking the court to set omnibus procedures to deal with this objection,” he said, noting that the request is slated to cause more delays.

The petition seeking the repeal of $6 billion in debt appears to have also had an impact on the mediation process because some creditors told Judge Laura Taylor Swain that the timing of the objection coincides with negotiations to settle the debt.

What can the board do in the 90 days it has left? Mudd said there may be new filings, including rumored bankruptcy petitions from the Puerto Rico Aqueduct & Sewer Authority and the University of Puerto Rico. UPR President Jorge Haddock said last week that UPR’s budget was balanced.

Where is all the rounding cash?

The settlement rounding cash, which was supposed to be used to iron out these shortfalls, was inexplicably distributed on a pro-rata basis from Depository Trust Co. to each nominee or custodian. “So, if a hedge fund received $1.2 billion in new Cofinas, out of the total settlement distribution of $12 billion, then they also received 10 percent (the same ratio as bonds received) of the rounding cash. This large cash transfer took place although it only requires $999, at most, to round up or down to $1,000. To allocate rounding cash on a pro-rata basis was ridiculous and should be clawed back from large holders, because this cash should have been allocated based on rounding needs, not ownership size,” said Glenn Ryhanych, CFP, CFA & president of BlueList Partners LLC.

“Who is responsible? Shame on all of the large-money funds and their advisers for pushing this scheme through. And, the Puerto Rico control board, commonwealth government and the Title III court are not blameless,” he said.

Puerto Rico gov says he didn’t defy fiscal board by paying the Christmas bonus

NARANJITO, Puerto Rico – Gov. Ricardo Rosselló Nevares said Wednesday that he did not defy the island’s fiscal control board (JCF) for paying the Christmas bonus to public employees.

“It’s not us challenging the Board, it is the Board challenging the government of Puerto Rico. My criterion is I am going to do what, in my opinion, is best for the people of Puerto Rico,” the governor told the press.

“This stems from the Board thinking it’s a gift. It’s not. If you compare the salary of a Puerto Rican teacher, it is two to three times lower. The Christmas bonus is part of that commitment so that this inequality is not so great, and if they could understand that, they would be less resistant,” he added.

The governor said the payment of the year-end statutory bonus will be given despite the fiscal board warning the government on several occasions that it cannot pay it.

The secretary of Public Affairs and Public Policy, Ramón Rosario Cortés, said, “Today, a large part of our public employees saw reflected the direct deposit of their Christmas Bonus in their bank accounts. Others will see it reflected tomorrow (Thursday) as well as what they charge in checks. The governor has instructed public corporations to make adjustments to pay this right that is part of the salary of our workers.”

However, fiscal board Executive Director Natalie Jaresko issued the following statement:

“As referenced in a November 14, 2018 letter to Governor Rosselló, the certified Fiscal Plan for the Commonwealth calls for the elimination of the Christmas bonus as part of cost reductions in Payroll and Related costs as a measure to avoid more drastic measures, and the certified budget reflects that the Commonwealth would not pay a Christmas bonus. The certified budget for the Commonwealth requires that the Commonwealth not exceed the total amount budgeted for Payroll and Related concept of spend.

“As the Commonwealth proceeds to pay a Christmas bonus to its employees this year, each agency will have to achieve an equal amount of savings within the Payroll and Related allocation to offset such an expenditure. Failure to achieve the requisite savings in the Payroll and Related concept of spend may result in Commonwealth agencies exhausting their Payroll and Related allocation in the certified budget before the end of fiscal year 2019, imperiling the Commonwealth’s ability to make payroll for its employees. We will continue to monitor spending and will evaluate whether to take any corrective actions.

“Puerto Rico has accumulated debt beyond the Commonwealth’s ability to repay, and has suffered from decades of financial mismanagement and ineffective delivery of government services. PROMESA [Puerto Rico Oversight, Management, and Economic Stability Act] was adopted specifically to respond to this situation. The Board has been charged with bringing the Island back to fiscal balance and returning market access to the Island. These mandates require many policy changes and implementation of hundreds of measures and structural reforms. Success for Puerto Rico, the end of the Board’s mandate, and a return to economic growth and hope are only possible with the Government’s steadfast cooperation.”

Treasury Department Teresa Fuentes had said that “the disbursement of $85.3 million was due to the effort by government agencies in their fiscal adjustments and the efficiencies that reflect an increase in revenues. This, without affecting the budget and the Fiscal Plan. Also, it is a boost for the economy and society….”

-Caribbean Business contributed to this report.

Puerto Rico fiscal board: Pension forecasts, projected PayGo payments were understated by $3.35 billion

SAN JUAN – The Financial Oversight and Management Board for Puerto Rico said Friday that after its review of the pension forecasts and projected PayGo payments in the new fiscal plan it had certified on Oct. 23, it concluded that the pension forecasts and projected PayGo payments through fiscal year 2058 were understated by $3.35 billion.

The revisions to the existing pension forecasts result in “no net material impact during the first 20 years of the projections (through 2038), and are concentrated in the last 20 years of projections (2039-2058),” the board said in its release.

The board said it will “further refine” the pension forecasts and projected PayGo payments after it “receives and analyzes more accurate information from the actuaries for the Commonwealth’s pension plans in the coming months.”

The revisions to the pension forecasts, projected PayGo payments and the anticipated “further refinements in the coming months, do not imply any change to the Oversight Board’s pension policy or to pension payments that have been budgeted. Rather, they represent changes to the projected cost for the Commonwealth to make its PayGo payments in the out years,” it wrote.

Fiscal board questions amendment to retirement law that would benefit mayors

Fiscal board Executive Director Natalie Jaresko (CB file)

SAN JUAN – The executive director of Puerto Rico’s Financial Oversight and Management Board, Natalie Jaresko, on Monday questioned Senate Bill 1148, which proposes to retroactively change the date that applies to participants that entered the Employees Retirement System (ERS) on or after Jan. 1, 2000, to benefit a few dozen mayors.

The mayors, most of which already get substantial pensions, would instead be covered by the old ERS’s defined-benefits program, she said.”Based on our review of the Bill, we believe it is not consistent with the certified Fiscal Plan for the Commonwealth.”

The commonwealth created System 2000 to close the defined benefit program for all new participants and “try to protect the financial condition of the Commonwealth’s largest retirement system,” she said.

At that time, all ERS participants who entered the system on or after Jan, 1, 2000, would be covered solely under System 2000.

“Amending this date now, 20 years later and when the financial condition of ERS is materially worse, would increase the amount of monthly PayGo payments. Therefore, the Bill is inconsistent with both the certified Fiscal Plan and the certified Budget for the Commonwealth,” she reiterated.

“Moreover, such an arbitrary benefit increase that applies to a select group of ERS participants that have comparatively high pension benefits would create a dangerous precedent, especially at a time when the assets of ERS have been depleted and ERS participants face reductions in their pensions.

“Finally, we request that you provide the fiscal analysis of the Bill. We would be pleased to discuss this matter in more detail with you and your staff at your convenience,” she wrote to Senate President Thomas Rivera Schatz and House Speaker Carlos Méndez Núñez.

Puerto Rico oversight board publishes fiscal plan fact sheet

SAN JUAN – Puerto Rico’s Financial Oversight and Management Board (FOMB) on Monday issued a statement clarifying what it called “misconceptions and untrue accusations” regarding the fiscal plan it certified for the commonwealth.

The fiscal board said the plan “is the roadmap to regain economic growth and sustainability which is a requirement for ensuring Government can provide more efficient and reliable services. A variety of untrue accusations have been made over the past week regarding what the Certified Fiscal Plan does or doesn’t do.”

The board assured the “only changes made to the New Commonwealth Fiscal Plan are growth projections as a result of poorer than expected structural reform implementation progress, actual fiscal year 2018 revenues and expenditures, and updates to the amount of federal disaster relief funding expected.”

The new document did not change “agency efficiencies savings required from the April to the June to the October Certified Fiscal Plans,” the board stressed, nor the “philosophy in the Certified Fiscal Plans with regard to Pension Policy.”

The Employment Retirement System (ERS) “was bankrupted by decades of insufficient funding from government contributions and is currently depleted (less than 1% funded),” the board said.

“FOMB has developed a pension policy that protects the lowest income individuals and reduces other pensions progressively, while acknowledging that some reduction in pensions is appropriate and necessary in the bankruptcy process. The overall reduction in pensions in the Certified Fiscal Plan remains 10% in fiscal year 2020 and has not been changed since the March 2017 first Certified Fiscal Plan,” the board said.

The fiscal plan “provides for measures to improve the affordability and efficiency of services being delivered to the people of Puerto Rico,” the board pointed out, saying, “Every elected official and every resident on the Island will agree that government can deliver services more effectively with the use of new technologies, improved processes, and do so at a lower cost. The population has decreased by 10% in the last 10 years or 12% between 2007 to 2017 (prior to Hurricanes Irma and Maria) and the cost of Government needs to adjust accordingly.”

The plan provides “more resources” to residents “in many key areas, not less,” among which the following are listed in the “Certified Fiscal Plan Fact Sheet” it published:

  • A locally funded Earned Income Tax Credit for those earning under $42,000 depending on children and marital status – a cash incentive to those working estimated to put $200 million per year back in the hands of those taxpayers annually (P. 48) [of the Commonwealth – Revised Fiscal Plan – October 23 2018]. 
  • A $5,000 increase in salaries for school directors starting this fiscal year (P. 80).
  • A $1,500 increase in salaries for teachers starting this fiscal year (P. 80).
  • $21-24 million per year to purchase new textbooks for public school students (P. 80).
  • $122 million to be paid this year to police who are owed a total of $366 million for past promotions and salary scales, which has not been paid over the last 10 years (General Fund Budget, P. 7).

The board also said structural reforms are not intended to benefit the island’s creditors, but its people, entrepreneurs and businesses, using some the following points as examples:

  • Energy reform will bring more reliable electricity at 20 cents per KWH [killowat-houe] or less.
  • Ease of doing business reform will enable entrepreneurs and businesses to access permits more easily, register property more easily, and reduce the administrative burden of paying taxes, among others.
  • Human capital and welfare reform will give incentives to individuals to come in from the informal sector where they have no Social Security and no labor protections — into the formal sector where they do.
  • Infrastructure reform will improve traffic congestion, increasing safety and reliability of roads, bridges and other infrastructure by prioritizing and ensuring available funds are used in the most effective way possible to make doing business on the Island easier and more efficient.
  • Structural reforms create growth and increase tax revenues such that the generated funds can be reinvested in education and job training initiatives that will prepare people in Puerto Rico (particularly young people) for the workforce and contribute to lower unemployment on the Island.

Read the full text of the board’s Certified Fiscal Plan Fact Sheet here.

Puerto Rico House speaker, lawmakers ask fiscal board to reconsider fiscal plan

SAN JUAN – The speaker of Puerto Rico’s House of Representatives, Carlos “Johnny” Méndez Núñez, along with several lawmakers, expressed themselves Wednesday against the fiscal plan certified by the island’s Financial Oversight and Management Board and requested that the panel revise it.

“What the [fiscal board] proposes is an austerity plan that would further aggravate the economic and fiscal situation of Puerto Rico. The Board certified a Plan that aims to further cut government services to create a surplus of $17 billion for the year 2023 that can only benefit creditors. That Plan goes against the strategies of economic development that we have been implementing for almost 2 years and we see its positive results in the recent jobs and economic activity statistics,” Méndez Núñez said in a joint statement.

Rep. José “Pichy” Torres, denounced that the board “proposes further cuts to pensioners, to our public employees, including the elimination of their Christmas bonus, and they intend to render inoperative important agencies such as the Police, Fire, Justice, among others. All this to have available for other purposes about $17 billion that Puerto Rico needs for its recovery.”

House Vice President Lourdes Ramos added that “the governor and this legislature will continue to defend the most vulnerable [citizens] and we will fight in all forums to protect the pensions of our retirees and the funds we need for the agencies to provide services and pay our public employees. We have had the will to make major needed transformations such as the reforms in PREPA [Puerto Rico Electric Power Authority], in Health, in Education, Labor, Permits and reducing about $2billion in operational expenses of the Government to guarantee and pay our pensioners and those of the University of Puerto Rico. That promise is going to be fulfilled.”

Majority Leader Gabriel Rodríguez Aguiló said that “this Fiscal Plan…will have a disastrous effect on the jobs we can create, in education, in security and even in the most basic services such as trash collection for our residents. With these austerity policies, we will aggravate the difficult economic and fiscal situation we have had for more than a decade.”

Puerto Rico gov: Fiscal board’s austerity plan would affect gov’t services

SAN JUAN – Puerto Rican Gov. Ricardo Rosselló Nevares said Tuesday that he will continue with his established public policy despite, he said, the fact that the draft of the fiscal plan presented by the fiscal oversight board for the government is an austerity plan.

“This is not a fiscal and economic development plan. This is an austerity plan. Our opinion is that the Fiscal Control Board has totally changed its approach and philosophy, not just the numbers. There are more aggressive cuts in the government. That has the consequences of affecting services and the most vulnerable,” the governor said on social media.

“These more aggressive cuts and a series of additional actions would result in a surplus of $30 billion in the next 16 years, money that would be available to the bondholders but would be detrimental to the most vulnerable and our population. This is not fair,” he added.

He assured that certain reforms to improve the government’s fiscal situation have been carried out.

“Let the people know very clearly that recognizing the historical challenges we face, the fiscal challenges that lie ahead, we will continue being consistent with the public policy that we have established because Puerto Rico does not deserve an austerity plan at this time. What Puerto Rico deserves is a transformation plan that does have as its base a component of fiscal commitment and economic development but whose main objective is the well-being of our people,” the governor added.

Rosselló made his remarks while the fiscal board held its 15th public meeting, in which the fiscal plans of the government and the University of Puerto Rico (UPR) would be certified.

On Monday, fiscal board Chairman José Carrión III announced the publication of drafts of the revised fiscal plans for the government and the UPR. He said the new fiscal plan projects a surplus up to fiscal year 2033, followed by deficits. The short-term surplus requires the timely and comprehensive implementation of structural reforms, fiscal measures and additional federal funds.

Carrión also announced adjustments to the UPR’s fiscal plan that the board said were achieved through a collaborative process. These included updating data based on lower enrollment, the fiscal impact of the measures and revised federal grant revenues.

Puerto Rico fiscal plan predicts surplus if reforms are carried out