The rejection to a 10 year fiscal plan for the University of Puerto Rico (UPR) will not prevent the institution from having to impose austerity measures in the coming months to enable it to operate, for they are already working on what their budget will be for the next fiscal year with multi-million cutbacks.
But the adjustments in this budget will not necessarily follow the same savings strategies that for months were discussed as part of the design for the fiscal plan that the university system should have delivered to the Oversight Board (OB) last Sunday, said UPR’s Governing Board president, Carlos Pérez Díaz.
Though they have had no access to the budget that the administration of governor Ricardo Rosselló submitted on Sunday to the OB, the news is that it will include a $149 million reduction in the allocation the university systems receives directly from the General Fund, Pérez Díaz said.
“A fiscal plan is not the same thing as a budget. We now have to go over each line item and determine where to make the cuts. The work had already started. Originally, when the cut (ordered by the OB) was for $300 million (in two years), we worked to obtain cuts for $150 million (for 2018),” the president of the Governing Board said.
At this moment, the information received is that they’ll keep the items that the institution receives as a result of special laws —such as funds from the Tourism Corporation under the Gambling Act— and by means of allocations from the Legislative Assembly, Pérez Diaz said.
The UPR failed to deliver a 10 year fiscal plan by April 30, after the Governing Board rejected the document prepared by the university’s administration. The plan which was not approved included annual cuts of up to $241 million starting on the sixth year, a proposal that was worked on after the Fiscal Agency and Financial Advisory Authority (AAFAF) submitted another proposal to impose cuts of up to $512 million for fiscal 2025-2026.
The task of drafting a fiscal plan for the UPR is in the hands of the OB, but so far the administration of the university system has not contacted the entity that controls the Country’s finances, Pérez Díaz said.
“We understand that consultants with the Oversight Board will be working on a possible fiscal plan for the UPR that could eventually be certified. At some point, there should be meetings between the UPR and OB representatives in that regard,” said the director of the Finance Office of the UPR, Norberto González.
“Had we approved a fiscal plan, perhaps there would have been meetings to discuss it and talk about it. But now we have nothing,” Pérez Díaz said.
With money to pay. There are two federal suits against the UPR for failing to pay its creditors, one of them filed by the trustee who oversees the funds owed by the institution, the US Bank, Pérez Díaz explained. The UPR has the funds to pay for its debts and has set the money aside every month in a private bank account, but is unable to deliver that money to its creditors because of the suspension of payments imposed by the Moratorium Act.
With the end on Monday of the stay on litigations against the government imposed by PROMESA, the university system is in a situation of uncertainty.
“We asked if we could start making payments, but have been told not to, for the time being, Pérez Díaz said.
Since it has the funds to pay its creditors, the UPR has no “immediate need” to seek protection under Tittle III of PROMESA as the government did yesterday, said, for his part, González.
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