The Fiscal Control Board (FCB) sued Governor Ricardo Rosselló and demanded that he enforce the certified Fiscal Plan and implement the workday reduction (furlough program) and pension cutbacks.

‘The furlough program and the pension overhaul are mandatory parts of the Commonwealth Fiscal Plan certified by the FOMB (Fiscal Oversight and Management Board),’ reads the complaint for declaratory and injunctive relief.

Although it was said the furlough would affect about 135,000 public employees, the security and education components will be exempted from this program.

FCB Chairman José Carrión III claims that the governor did not comply with the 90-day grace period—which started on March 15, 2017—to notify Congress or the president of the United States that he would not take on the FCB’s recommendation to reduce the workdays for public employees.

According to the 30-page document, ‘at no time within 90 days after March 15, 2017, did the Governor or Legislature notify the FOMB, the US President, the Majority Leader of the United States Senate, or the Speaker of the United States House of Representatives of a decision not to adopt the furlough program or any other provisions in the Commonwealth Fiscal Plan.’

In the complaint, the Board asks the court to declare that:

The Commonwealth Fiscal Plan, as certified by the Board under PROMESA, includes its Amendments (including the amendments requiring (1) a partial furlough program if certain benchmarks are not met, and (2) a pension overhaul)

The Amendments are mandatory and binding provisions in the Commonwealth Fiscal Plan.

And the governor must enforce and comply with the Commonwealth Fiscal Plan in its entirety, including its Amendments.

The Board is also petitioning the court for an injunction prohibiting the governor from refusing to enforce and comply with the Commonwealth Fiscal Plan (including its Amendments) or otherwise treat such amendments as if they were not part of the Fiscal Plan.

‘Fiscal reform is a difficult but necessary process for Puerto Rico and the credibility of the plan lies in its enforcement. While our preference was to avoid this step, we believe it is a necessary measure to keep Puerto Rico on track with its commitments to reduce spending and build stable foundations for its economic future,’ said FCB Executive Director Natalie Jaresko.

‘Puerto Rico’s financial situation did not deteriorate overnight, and fixing it is going to be difficult, but we have the tools to do it. We will continue to work with the Puerto Rican government to execute the certified Fiscal Plan that achieves financial sustainability and improves the economic fortunes of the Puerto Rican people,’ Jaresko concluded.

Rosselló Reacts with Composure

For his part, Governor Ricardo Rosselló Nevares said he was not surprised by the lawsuit.

‘I think everyone was expecting it. It’s no big surprise. We understand our argument has a legal base—act number 205. We are implementing the fiscal plan. The workday reduction was a recommendation that had been included as an amendment to the fiscal plan. In the same vein, we want to demonstrate, not only before the Fiscal Control Board but also the people of Puerto Rico, why we are right in saying the reduction is not necessary right now,’ Rosselló Nevares replied to questions from the press.

‘I do not oppose the furlough program in theory. But there are practical reasons why it’s not necessary right now. We have complied with the established objectives, but we’re wiling to look for other alternatives,’ he added.

Rosselló Nevares insisted that he has the evidence to show the furlough program is not necessary.

‘I will prove it, not only before the court but before the people as well,’ he concluded.