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Yesterday, the Legislative Assembly approved the main measures of the budget amidst heated debates that anticipated a confrontation with the Oversight Board in court.

However, versions regarding what the legal dispute would be about varied significantly.

Minority Senators, such as popular Cirilo Tirado and pro-independence Juan Dalmau, proposed that no budgetary measure would be endorsed to activate the territorial clause that extends the validity of the government spending scheme for an additional year.

This way, when the Board approves its version of the budget, their would be a discussion regarding the powers of the federal entity versus the provisions of the Puerto Rican Constitution.

Early yesterday, Antonio "Tony" Soto, chairman of the Puerto Rico House Finance Commission, argued that the Board´s position -not giving way to the budget endorsed by the Legislature if the Unjust Dismissal statute was not repealed (Law 80)- violates procedures established in PROMESA.

"If it has to be only one thing (the repeal of Law 80), then you are not giving me a recommendation (as established by PROMESA). They can give recommendations on public policy, but they do not have the power to force us," Soto said at a press conference in the Puerto Rican Capitol.

"PROMESA was not approved to promote whims neither to deprive American citizens of legislated rights," said Senate President Thomas Rivera Schatz.

When addressing his colleagues in the House, the senatorial leader anticipated that, if the Board cuts an additional $ 300 million from the budget in case Law 80 is not repealed, they will take the case to court.

He said that the fiscal entity cannot make new cuts by arguing that the budget approved yesterday is not in compliance. He noted that the underlying motivation is a "whim" without economic justification.

The legislative version of the budget contemplates an expenditure scheme of $ 8,709 billion, $ 40 million less than what the Board recommended in May.

By then, the fiscal entity and Governor Ricardo Rosselló Nevares had reached an agreement to repeal Law 80 in exchange for a series of increases in budget items and the temporary duration of the Christmas bonus and vacation and sick leave. 

Due to that agreement, that some legislators branded "blackmail" yesterday, the Board amended the certified fiscal plan. However, those changes may be reverted, informed the Board yesterday.

The Popular Democratic Party (PDP) in the House came to propose that the budget amount should be even lower, about $ 8,4 billion in order to leave the Board without arguments regarding not compliance with the certified fiscal plan.

However, that recommendation was not considered by the majority, which concentrated on advancing the process of the main measures of the budget.

Generally, the government income and expenditure scheme approved by the Legislature passes to the governor for his final endorsement. Under PROMESA, after the signature, the Board has to issue a certification or impose its own version of the document. That is what happened last year when the budget for the fiscal year ending today, June 30, was discussed.

Yesterday, neither the House nor the Senate addressed the resolution on legislative donations.



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