Fiscal Board Asks for an Additional $319 Million in Budgetary Cutbacks (document)
Today (Tuesday), the Fiscal Control Board (FCB) confirmed its eighth public meeting--to be held on Friday, June 30--and sent a letter to the legislative leaders asking for an additional $319 million in budgetary cutbacks for FY2017-18.
Although the Board acknowledges that the budget achieved a 9% reduction in expenses, they are demanding five significant changes to what was approved early Sunday morning in the Senate.
In the letter addressed to Senate President Thomas Rivera Schatz and House of Representatives Speaker Carlos ‘Johnny' Méndez, they identify three areas of excessive expenditures that add up to almost $119 million:
1- Increased legislative expenditures, from $131 million to $147 million. The $16-million increase does not meet the same rigor as other budget components and, in some cases, it appears duplicative of other expenses.
2- Non-legislative expenses adding up to $78 million for payroll, operating expenses, subsidies to municipalities, and sports activity spending, among others. This violates the provision to eliminate the 1% budgetary reserve.
3- Revision of the $30-million reduction to subsidies for various industries, associations, museums, foundations, festivals, choirs, ballets, operas, marathons, scholarships, and professional athletes. The final reduction totaled less than $5 million, so an additional $25-million cutback is required.
They also included two other requests:
1- Identify specific actions to achieve $200 million in reductions, from the total $440-million savings, in the government's restructuring plan. This request is meant to avoid the implementation of working-day reductions and the elimination of the Christmas bonus.
2- Correct the technical oversight in the Judicial Branch budget, as it appears in the final version of Joint Resolution Bill 186.
In conclusion, the Board suggests two alternatives to address their requests. 'The preferred' alternative is for the government to reduce the pinpointed expenditures. Otherwise, they warn that the working day and the Legislature's budget could be effectively reduced, and the Christmas bonus could be eliminated. The budget recommendations are one of the issues to be discussed in the Board's eighth meeting on Friday.
In fact, the entity established a deadline—Thursday at 5:00 pm, the day before the meeting—to receive a reply to their observations. They also warned that if this deadline is not met, they would submit their own budget, in accordance with PROMESA, which would become the official budget.
The encounter will be held at 8:30 am, at the Miramar Boardroom of the Sheraton Hotel in San Juan. The members of the board created by PROMESA are expected to certify the budget that same day.
During the meeting, the Board will be considering:
Approval of the 4/28/2017 meeting minutes
Report by the Board Chair
Administrative matters
Presentation, assessment, and recommendations of the proposed budgets for the Commonwealth of Puerto Rico, Government Development Bank for Puerto Rico (GDB), Puerto Rico Highways and Transportation Authority (PRHTA), Puerto Rico Aqueduct and Sewer Authority (PRASA), and Puerto Rico Electric Power Authority (PREPA)
Public comment, discussion and certification of budgets for the Commonwealth of Puerto Rico, GDB, PRHTA, PRASA, and PREPA
According to a press release, the meeting will be open to the public and requires pre-registration before Thursday, June 29, 2017. The pre-registration form, as well as the required security and attendance protocol, is available at the FCB's official website: www.oversightboard.pr.gov. The meeting will also be broadcast live, with both English and Spanish audio.