Even with the government-imposed austerity measures in recent years, Puerto Rico´s budget is large enough to make cuts that produce the savings needed to pay the threatened Christmas bonus of public employees without affecting the balance between revenues and expenses.
However, several experts in fiscal and economic issues agree that the ability of the government to identify those areas with "surpluses" or to make the fiscal decisions that would produce these savings, often depend on economic or partisan interests of the current government.
According to the Chief of Staff, Raul Maldonado Gautier, the payment of the Christmas bonus implies an annual disbursement between $ 80 million and $ 120 million. Only by limiting the operation of the State Election Commission (CEE, Spanish acronym) to electoral years, the government would save about 33 percent of the money it needs to pay for the bond, said economist José Caraballo Cueto.
El Nuevo Día consulted with five experts in finance, public administration and accounting and came up with 15 recommendations that, if executed correctly, could generate, in the short-term, savings of over $ 100 million per year and much higher in the medium or long-term, especially if what essential services for state and municipal governments are finally defined.
Following Judge Laura Taylor Swain’ decision, it was determined that the budget certified by the Oversight Board at the end of June - that amounts to $ 8.758 billion - is the one that should come into effect. This budget, as expressed by several members of the governor´s economic cabinet, has a series of inefficiencies that could render some agencies inoperative.
In addition, the budget does not have an item for the Christmas bonus. Last Wednesday, Maldonado, in an interview with El Nuevo Día, noted that the government's intention is to pay the Christmas bonus without dismissing public employees. He maintained that they will request a series of changes to the budget certified by the Board, which is $ 48 million higher than the one endorsed by Governor Ricardo Rosselló Nevares.
Some recommendations made by the experts have been verbalized by the Rosselló Nevares administration, but they have not been implemented yet or are in the process of being enforced. Others have simply not been publicly discussed.
The experts agree that it should be finally defined what an essential service is and what a dispensable government program is. In this process, one can not fall into simplifications such as affirming that all public functions are necessary, as was argued during the administration of former Governor Alejandro García Padilla, recalled finance expert Antonio Fernós Sagebien.
"The government of Puerto Rico has had a big problem in defining essential services. By having no clear definition, it has not been able to plan or cut in line with the basic services that are really essential and insists on usual spending," explained public administration professor Víctor Rivera Hernández.
Experts agreed on another recommendation and that was regarding high expenses on professional services. Some estimates suggest that this type of contract has reached $ 480 million in the last two years, said Rivera Hernandez.
"When you start to investigate how contracts are made, the programs they serve and how they make purchases, you realize that there are a number of efficiencies that can be achieved," said Arnaldo Cruz, of the Abre Puerto Rico organization.
As for "the advisors, I would make adjustments because many of those expenses are not essential. I would also consider the premise of what is important the other way. That is to say, I would ask myself where I cannot cut and then I would start to examine the rest. There are some areas where, clearly, there cannot be budget cuts, such as education, health, safety,” said the accountant and President of the Chamber of Commerce, Kenneth Rivera.
Specific operations
In addition to the temporary closure of the CEE and the offices of the Permanent Registration Board in non-electoral years, the possibility of selling or closing radio and television stations of the Puerto Rico Public Broadcasting Corporation (WIPR) was mentioned.
"There is a lot of talk about the WIPR and the EEC ... In this process where money is not enough, the important thing is to establish priorities. And that exercise should be done both for the Puerto Rican government and municipalities," Rivera said.
For Caraballo Cueto the government can generate quick and substantial savings if the Mi Salud (My Health) program is changed to a single-payer system that eliminates or limits the intervention of insurance companies.
"If a single-payer system is implemented, this is where a lot of money could be saved. More than $ 100 million could remain in the government coffers," said the economist. This proposal, however, has been discussed for more than a decade without the spheres of power having the will to implement it.
Other recommendations include the consolidation of public entities with similar functions, such as the Land Authority, the Land Administration and the Industrial Development Company, which manages the Puerto Rican real estate. That integration, so that it generates savings, should not be limited to the creation of a new umbrella agency, but must merge functions, said Fernós Sagebien.
In this reorganization process, a process of regionalization of municipal and state functions must also take place. This would help, for example, to eliminate double efforts such as the offices that promote sports at the state and municipal levels. "The problem is not so much that there are many municipalities, but that there are many municipalities that have gone bankrupt," Fernós Sagebien said.
In the area of real estate, the government should reduce the spaces it rents, and start using its own abandoned properties, and reduce t energy consumption with the use of LED bulbs and technology that promotes efficiency.
At the labor level, the experts mentioned the renegotiation of collective agreements to reduce payroll expenses and the imposition of a salary cap for government executives.
Also, some initiatives that the government itself seeks to promote were highlighted, like the automation of processes such as license renewals, improvements to the integration of accounting systems with updated computer programs and changes in the budget to include performance targets.
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