Governor Ricardo Rosselló Nevares said that the Christmas bonus to public employees will not threaten the government payroll spend during the last months of the fiscal year.
However, the governor offered little or no information regarding the "savings" that his administration reached to offset this $ 85.3 million disbursement.
Last November, Natalie Jaresko, the Board´s executive director, warned in an official letter that, in order to pay for the Christmas bonus, the government had “to achieve an equal amount of savings within the Payroll and Related concept of spend to offset such an expenditure,” and that failure in the required savings may result in exhausting payroll funds.
Yesterday, at a press conference in Naranjito, Rosselló said that they had enough savings to pay for the bonus. However, he did not detail where these savings were achieved. He only mentioned that they were savings made by government agencies.
The Christmas Bonus represents a large item in the payroll, similar to what the government collects in “marbetes” (stickers that all vehicles must have to operate legally in Puerto Rico).
"We are reducing spending. We have identified savings for different concepts and we have been able to redirect these savings in budget payment," Rosselló Nevares said at the press conference.
The problem, however, is that in order to reallocate those funds, the government needs the approval of the Board and that has not happened and does not seem to be on the agenda of the entity overseeing the government´s finances.
In fact, yesterday, Jaresko reiterated her warning that the bonus was not budgeted and that the government has to generate equal amount of savings within the Payroll and Related concept.
"As the Commonwealth proceeds to pay a Christmas Bonus to its employees this year, each agency will have to achieve an equal amount of savings within the Payroll and Related allocation to offset such an expenditure," said Jaresko.
According to economist and finance expert Antonio Fernós Sagebién, this situation will lead to a series of additional confrontations and -in the best of cases- to a new "adjustment" to the government's fiscal plan in which more spending cuts.
"They themselves do not know where the cuts have been made. This action will have a reaction from the Board and there will be new changes to the fiscal plan," said Fernós Sagebién.
Meanwhile, former representative Ángel Cintrón said that beyond the payment of the Christmas bonus, the Board is looking for a change in the way the government handles its finances.
"I thinks that this is the Board trying to change the way the government of Puerto Rico and the governor handle (finances), a balance of interests ... The governor's team must already have the way to balance the budget. It would be worthless to pay the bonus now and then have a crisis in April," said Cintrón.
For the governor, however, the Christmas bonus is a philosophical matter. He indicated that for the Board this benefit is a gift that should be eliminated. For Rosselló Nevares, on the other hand, the Christmas bonus is a tool to correct low wages in Puerto Rico and, especially, in the government.
"The bonus is part of that commitment so that this inequality is not so great," he said.
The governor said that in 95 percent of the cases, his administration is in line with the demands of the Board. But, he argued that in some issues, such as the Christmas bonus, he will challenge the Congress created fiscal entity.
“It’s not us challenging the Board, it is the Board challenging the government of Puerto Rico. If we have the money, and we have identified it, why do they want to interfere in something like this? " Rosselló Nevares questioned.
The governor said that he was going to do what, in his opinion, is good for Puerto Rico and not what the Board says.
According to the Board, there are breaches in the information exchange processes. Specifically, the fiscal entity has requested a report on spending for the first quarter of the fiscal year and reports on the budgetary impact of more than a hundred new laws.
Rosselló Nevares -instead of explaining the delays in the delivery of these documents- simply pointed out that the Board repeatedly failed to comply with the requests the government made to the entity.
He said, for example, that the Board usually takes much more than the seven days established to evaluate the contracts submitted by the government.
He also alleged that they submitted more than 30 requests for changes to the budget and most of them did not receive any response from the Board.
The governor said that the Board only argues “non-compliance” when it suits them, because “they are not complying.”
Rosselló´s expressions took place at the Francisco Morales school in Naranjito, where it was reported that the multinational tech company Intel donated 1,000 computers to 22 public schools.
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