In a partial victory for Governor Ricardo Rosselló, the Fiscal Oversight Board (FOB) agreed to extend the stay on debt collection litigation until May 1st, and to extend the deadline for the Governor to submit his five-year fiscal plan until February 28th. The Board gave itself until March 15th to approve or reject the fiscal plan. The extensions came with heavy strings attached. Though the FOB deferred to the Governor on public policies he may want to set, they also insisted that the government balances its budget within two fiscal years and that it enact $4.5 billion in spending cuts and revenue increases. The Governor also had to accept the Board’s condition against seeking short-term financing to balance the budget.
Two weeks ago, the Board suggested that the Governor cut $1 billion in health care spending, increase “efficiencies” in the University of Puerto Rico by $300 million and cut pension benefits by 10%, along with $3 billion in spending cuts and $1.5 billion in revenue hikes. The Governor at the time rejected the proposal, which also included the dismissal of public employees, and said he would reduce spending in other ways.
Governor signs Labor Reform bill into law, businesses start to adjust
The Governor signed his Labor Reform bill into law and businesses have already begun to adjust to the new environment. The new law reduces sick leave and vacation days, and increases the amount of work hours required to accumulate leave. The new law also repeals the Sunday Closure Law, which limited business hours and salable products on Sundays, and awarded overtime-like pay for Sunday work.
Moratorium law extended
Governor Rosselló also signed a law replacing and extending most parts of former Governor Alejandro García Padilla’s Debt Moratorium Law. Though Rosselló has stated that the intention of the new law is to pay the government’s debts, the law’s provisions clearly state that the government can default on debt payments to prioritize payments for “basic services.” Administration officials have not yet been able to define which “basic services” would have priority over debt payments.
Single-Employer bill to be approved soon
A bill to make the Central Government of Puerto Rico a “Single Employer,” will be headed to the Governor’s desk later this week, according to New Progressive Party (NPP) legislative leaders. The bill is intended to provide “mobility” to public employees, so that employees can more easily transfer between agencies based on each agency’s need. Critics argue that if not crafted carefully, the bill would allow “capricious” or “unscrupulous” supervisors to punish or discriminate against certain unprotected employees.