The government’s representatives before the Oversight Board (OB), Elías Sánchez Sifonte, yesterday rejected that the time extension granted by that body to deliver the country’s budget may be the result of the proposal not being in line with the certified fiscal plan.
On Monday the OB granted the administration of Ricardo Rosselló Nevares 14 extra days to “mend and improve” the first budget to be submitted in the context of the certified fiscal plan and under Tittle III of PROMESA.
“The budget was not turned back. That is incorrect. This budget –as opposed to other budgets in the past - has come through interactions with and requirements by the Board in order to maintain its premises,” said Sánchez Sifonte in a telephone interview with El Nuevo Día.
He noted that, previously, when the government would craft the budget it would expound on a series of expenses based on a revenues forecast without submitting evidence. “Now, it’s not like that. Now, one has to work supporting each expense, how it fits in with the fiscal plan, and how it goes in line with the implementation of the reforms being proposed,” Sánchez Sifonte said.
In this sense, he insisted that the OB did not return the budget to the governor, but rather said that they must have additional time to make a more in-depth analysis. “That’s the reality. They’ve not turned anything back, but rather the Board and the government need more time to produce a budget that meets all the requirements and that is consistent with the fiscal plan in such a manner that it adopts all the proposed changes and transformations,” he assured.
Likewise, Sánchez Sifonte rejected that there is a mismatch between the numbers and the information provided to the OB to prepare the budget which becomes effective next July 1.
“There’s not been any notification of any mismatch. In the letter, what they said, was that they needed more time to issue an opinion, to notify whether or not it’s in compliance,” he added.
As recently as Monday, the secretary of Public Affairs of La Fortaleza, Ramón Rosario Cortés, said the budget submitted to the OB, last April 30, was in line with the certified fiscal plan.
PROMESA, a federal law, requires budgets to be consistent with the fiscal plan. “If you look at the 2017-18 fiscal plan, the parameter relating to revenues and expenditures has to be exactly the same in each of the measures adopted,” he pointed.
The fiscal plan and the budget, contemplate measures to add more revenues, reduce expenses, and make savings. These measures include the creation of public-private alliances, the merging of all the social services and economic development agencies, the jails, and the closing of 179 public schools.
Also, the plan includes mechanisms to increase the collections by the Treasury Department and its intervention in public agencies.
Sánchez Sifonte indicated that this new scenario entails a challenge for the government given that initiatives must be aligned with the government’s forecasted savings and expenditures.
Another complication is the absence of audited financial statements. The most recent give an account of a precarious situation with the government’s finances for fiscal 2014.
“The Board itself has said –when the expenditures item is explained – that there has to be a comparison with previous budgets to be able to evidence the need for any expense in the absence of audited financial statements,” Sánchez Sifonte said.
The governor has said that the line items with which the government will operate starting July 1, made partial use of the “zero-line” model, which was one of his promises during the election campaign.
According to forecasts in the fiscal plan, by 2018, the government will only fetch $8,360 million in revenues if no additional measures are taken. Also, estimates of the fiscal plan suggest the economy will fall by 4% during that fiscal year.
The government expects an additional $924 million during 2018 as part of the fiscal restructuring.
Says it’s only a draft. On the other hand, the representative of the governor before the OB defended the decision by the government of not making the budget delivered to the OB public.
The spokesperson for the popular (party) minority in the Senate, Eduardo Bhatia, sued the government demanding to make the budget public. Judge Lauracelis Roques Arroyo, of the Court of First Instance of San Juan, granted the government five days to respond to the allegations contained in the suit.
“Never in the history of Puerto Rico has a draft budget been made public. I just can’t see how legislators from the Popular Party, who were never able to see a draft budget, now want to see what they were never able to see in the past,” said Sánchez Sifonte, who maintained that the document is not public because “it’s not finished”.
“Documents are shown once they are final,” he sentenced.
He assured that once the OB certifies the budget, the Legislative Assembly will have ample time to evaluate and approve it. “The are going to have more time than in the past. You will recall that in previous fiscal years the budget arrived to the Legislature in June,” he concluded.
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