Although the emergency response can still be improved, the Board executive director Natalie Jaresko said that Puerto Rico has moved more assertively in the management of the COVID-19 virus than other states in the United States. She also indicated that given the new scenario the world is going through, the federal agency intends to review the entire fiscal plan.
Most importantly, Jaresko said the Board will seek to put changes to the island's health care system at the top of the list, an agenda that if implemented from the beginning might have served to better respond to the current health care crisis.
According to Jaresko, this more assertive response is partly related to the measures that the Board has been enforcing for almost three years to strengthen the state of public finances.
Jaresko said that on the other hand, they will continue with the restructuring plan and that while there is over $18 billion in government bank accounts, more than half of that money is committed or restricted, even to Puerto Rico residents.
According to Jaresko, Puerto Rico has done “a lot has been done in a short time. Compared to other states, I think Puerto Rico has even gone further. I don't know of any other jurisdiction that has reduced the tax on health products and exempted sales tax on prepared foods. Both things together, provide about $33 million in support," Jaresko said, referring to the request made by the Wanda Vázquez Garced administration to the Board to adjust the Sales and Use Tax (SUT) as a counterweight to the crisis created by the COVID-19 pandemic.
Jaresko indicated that in the past years, much has been accomplished financially and that “Puerto Rico is doing better in fiscal terms." She added that the adjustments implemented have also served for this situation.
Last week, before Vázquez Garced ordered businesses shutdown and a two-week curfew to curb the spread of the pandemic, which already has more than 200,000 cases worldwide, the Board also approved two requests for assistance by the government.
The first request was a $5 million allocation from the Emergency Reserve to be prepared for the epidemic.
The second request the Board approved was to use the remaining $160 million from that same fund to treat and control the pandemic on the island.
That figure is, by far, above the $5 million Alabama approved to help its health care system in the face of the pandemic; the $20 million requested by the governor of California for the same purpose or the $25 million approved by the Florida state legislature. New York approved about $40 million to deal with COVID-19 and the state of Georgia requested about $100 million. This, according to the National Association of State Budget Officers (Nasbo).
The emergency reserve
Almost three years ago, when the Board approved its first fiscal plan, they determined that the government should have an Emergency Reserve within the budget that would only be used for that purpose. This item should receive an annual injection of about $130 million.
That reserve was the one the government used to deal with the earthquake emergency and the one it now has available, Jaresko said.
To date, according to reports sent to the Board, Vázquez Garced's administration has used about $6.7 million to deal with the coronavirus pandemic in educational campaigns, prevention measures, purchase of supplies and equipment for hospitals.
Jaresko indicated that state resources could be combined with the support that would come from the federal government.
El Nuevo Día asked Jaresko why not using more resources to mitigate the economic effects of the pandemic on the island when the government keeps over $9 billion in its main account.
Considering other items such as public corporations, the government, and its instrumentalities have about $18.5 billion.
But according to Jaresko, most of that money is restricted.
That money is essentially committed or restricted because it is subject to what will happen with the debt restructuring under PROMESA Title III.
Just the adjustment plan proposed in court, Jaresko said, commits about $4.5 billion, and that money includes the trust fund to pay pensions, reimbursing public employee contributions under the System 2000.
"Just for the government to keep moving and flowing, they need $2 billion in operating capital every year," Jaresko said.
Health Care System
Jaresko does anticipate changes in health care projections in the new fiscal plan.
"We're looking at everything right now. We always review, that's what we always do, but we need to update the plan for this new reality that Puerto Rico and the entire world experience, to support the needs of the people of Puerto Rico and to ensure that the resources are available," Jaresko said.
In that exercise, the official added, strategies aimed at modifying health care services in Puerto Rico will be a priority. According to Jaresko, although there is a worldwide shortage of health equipment due to the coronavirus pandemic, the fiscal plan includes several strategies to strengthen the system's administration and avoid the current fragmentation but none of this had been implemented.
"We will be reviewing the fiscal plan and that will be at the top of the list," said Jaresko.