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University professors seek annulment of Puerto Rico fiscal plan

By on July 10, 2017

SAN JUAN – In a new chapter between the fiscal control board and the University of Puerto Rico (UPR), the Mayagüez campus professors’ association (APRUM by its Spanish acronym) sued the federally established oversight panel and the government of Puerto Rico to invalidate the island’s fiscal plan and the budget cuts it contains for the academic institution.

The lawsuit, filed Sunday as an adversarial process in the government bankruptcy case under Title III of the Promesa law, requires that the institution be considered an essential service, that the fiscal plan be invalidated for violating federal law and “threatening” the stability of the UPR, and that the budget approved by the board in late June be amended “to ensure continuity of educational services,” the APRUM said.

“The board’s determinations in the fiscal plan and imposed in the 2017-18 budget are arbitrary, lack rational basis and are in clear and open violation of the requirements of Section 201 of Promesa,” the lawsuit filed by the Mayagüez campus professors reads.

The lawsuit names Gov. Ricardo Rosselló; the fiscal board’s executive director, Natalie Jaresko; Treasury Secretary Raúl Maldonado; the director of the Puerto Rico Fiscal Agency and Financial Advisory Authority, Gerardo Portela; and Office of Management and Budget (OMB) Director José Marrero as defendants.

The executive director of the fiscal control board, Natalie Jaresko. (Juan J. Rodríguez / CB)

APRUM President Marcel Castro called on creditors to worry about “defending the University,” saying that the island’s public university is essential to boosting the island’s economy amid its fiscal crisis.

“The UPR is an essential service, and as such, is protected under the Promesa law. It is essential for those who depend on its quality educational offering, for those who benefit from its extensive outreach programs, for those who are cared for by its medical faculty and for those who count on services such as the Seismic Network for their security,” he said.

Attorney Rolando Emmanuelli, who represents APRUM in the legal action, argued that the UPR was designated an essential service by fiscal board, Chairman José Carrión, while maintaining that Commerce and Export Secretary Manuel Laboy also included it as an “indispensable partner” in several economic development initiatives for the island.

“The University of Puerto Rico is the main catalyst for sustainable economic development in Puerto Rico; therefore, it constitutes an essential service […] as defined by Section 201 of Promesa,” the lawsuit reads, adding that the fiscal plan should ensure sufficient funding for the UPR.

According to APRUM, the $201 million reduction in direct government transfers to the UPR budget does not fulfill the Promesa mandate as it would have an adverse effect on the university’s operations, particularly those in the Mayagüez campus.

If not revised to protect the essential services offered by the UPR, “the illegal fiscal plan and the 2018 budget cannot serve as a basis for any debt adjustment plan that complies with the U.S. Constitution and [federal] laws,” the lawsuit adds.

The most recent draft of the institution’s consolidated budget—which includes transfers from the general fund, federal funds and other revenue—reaches $1.35 billion, or $103 million less when compared with the previous year and a $74 million difference compared to the OMB’s $1.27 billion budgetary allocation.

Meanwhile, the UPR continues without a president, while its governing board, which recently resumed work after regaining the necessary quorum, is still working on the preparation of a fiscal plan for the institution.

Demanda APRUM (Text)

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