The inclusion of Christmas bonus payments to public employees and other expenses that total $1.5 billion are at least two of the reasons why the next fiscal year budget fails to comply with the Fiscal Plan certified by the Oversight Board.
Yesterday, the entity overseeing the island's finances released a letter - dated May 11 - in which Board Director Natalie Jaresko notified Governor Ricardo Rosselló Nevares that “FY20 budget is not compliant with the Revised Fiscal Plan and does not meet the requirements set forth by the Oversight Board,” and required “substantial revisions and additional information,” from the Government no later than May 17.
The governor immediately stressed that the government will not give in to the Board's insistence on reducing pensions or eliminating the payment of the Christmas bonus.
Rosselló said the government will simply not negotiate some items.
Rosselló Nevares said that “there are other areas where we can work as we have done before,” to see where they identify resources. “That is part of our job,” he noted.
The governor said he was not surprised by the Board´s determination "because we have different points of view on public policy."
"They have always done it. It's not a surprise... because it's always been that way," he stated.
For Rosselló Nevares what the Board determines as non-compliance are “vices”, product of “this colonial system we have.” Although the government drafts the budget which must be approved by the Legislature, the Board must endorse it and can approve the budget it recommended, which happened the last two years.
Rosselló Nevares questioned that the Board rejected the proposed budget based on a fiscal plan that they later certified. The budget was submitted to the Board on March 28, and the fiscal plan was approved on May 9.
The Board pointed out that "General Fund Government’s submission exceeded the Oversight Board’s FY20 target by approximately $1.5 billion" and that "the Government’s submission included Christmas bonus payments to employees amounting to a total of $41.2 million.”
The entity also noted that the budget includes additional funds in the Office of Management and Budget beyond the emergency reserve, that the fiscal plan set at $130 million.
On the payment of pensions, the Board demanded more transparency and details. They stressed that there are "PayGo obligations for agencies that no longer exist," although the PayGo appropriation is included in the Treasury.
The UPR also objects to the Board´s determination
Just like the governor, the president of the University of Puerto Rico (UPR), Jorge Haddock, rejected the Board´s requirement for the UPR to implement additional austerity measures such as more tax cuts and a new rise in tuition fees.
In a letter issued last May 1, the Board requested the UPR to include new increases in tuition costs, among other fiscal measures in its fiscal plan.
"Imposing new measures could disrupt the quality of education and we will not allow that," Haddock said.
However, hours after, the Board issued a statement saying that the UPR has not been asked to include additional fiscal measures, expenses or income that were not already contemplated in the fiscal plan.