The Oversight Board plans to certify today a new fiscal plan for Puerto Rico with more conservative economic projections, but it will also outline a roadmap that will reallocate a significant portion of the ordinary expenses to safety, health, and education, said the entity's executive director Natalie Jaresko.
Despite the already-known disagreements with the government, the Board's fiscal plan will include some issues they consider crucial and that include eliminating the Christmas bonus, setting the employer's contribution to health insurance at $125, and requiring the government to document and include in the budget the impact that preferential credits and agreements to companies and individuals impact the treasury.
On the other hand, according to Jaresko, the fiscal plan lays the foundation “to ensure salaries and mandatory benefits for” police officers are increased 30 percent over two years. Meanwhile, teachers and school principals, as well as firefighters, would see a salary increase of about $500.
Jaresko added that no student will be denied access to the UPR (University of Puerto Rico) and indicated that the fiscal plan to be certified provides an annual allocation of $39 million for a scholarship fund for university students, based on their economic needs. That is $4 million higher than the allocation from the scholarship fund approved this year.
Today, while waiting for President Donald J. Trump to send the nominations to the U.S. Senate, Board members will hold their 16th public meeting at the Puerto Rico Convention Center.
There, the entity with powers over the elected government of Puerto Rico, will discuss a fiscal plan that provides updated information on the island's birth rate; extends - to 15 years - the period for Puerto Rico to receive federal funds as a result of Hurricanes Irma and María, and analyzes the government's capacity to pay public debt over a 30-year period.
Jaresko said that the analysis of the sustainability of the 30-year debt has been adjusted because that is the validity provided in the Constitution.
Although last March the Board met for a special hearing on safety issues, today's hearing would be the first since last February the First Circuit Court of Appeals ruled that the appointment of the members of the Board was unconstitutional and that therefore, it should cease its operations next May 16, unless the White House confirmed the appointments. This week, the federal appellate court granted them 60 days to complete the process.
“The plan contemplates measures to prevent a reduction in nursing staff, but also provides incremental funds to ensure that the Comprehensive Cancer Center, the Cardiovascular Center and the Psychiatric Hospital can improve their operations,” said Jaresko.
Among other items, the plan provides about $25 million for the Comprehensive Cancer Center and another $2.5 million for the Cardiovascular Center, while the Psychiatric Hospital will be granted resources so that it can receive Medicare certification and provide services to that population.
The Board also reduced savings goals in health care reform.
However, the new projections continue to point to a long-term deficit, making the surplus available for debt repayment at about $19.7 billion.
According to Jaresko, these projections come from a better performance after Hurricane María.
In fiscal year 2018, according to the Board, the economy -measured by gross domestic product- would have shrunk 4.7 percent. But, on the other hand, the economy will not show such optimistic figures because of the delay in structural reforms and because federal funds will be released more gradually than previously estimated, Jaresko said.
According to Jaresko, the Board has decided to redirect government resources to safety, education, and health after multiple meetings with the government and various groups from those sectors.
However, funding this new objective will be done at the expense of cuts in other areas such as a 30 percent reduction in professional services expenses, plus cuts to the Legislature and agencies such as the State Elections Commission.
Similarly, according to Jaresko, the Board will establish that the Department of the Treasury will not be able to grant more than $250 million in tax credits to companies and this year, subsidies cannot exceed $340 million.