Spotlight on Puerto Rico – FOB certifies Governor’s budget pending adjustments

By Jennice Fuentes /Fuentes Strategies

Governor Ricardo Rosselló’s proposed $9.2 billion budget was quickly certified by the Fiscal Oversight Board (FOB), but with several caveats. FOB Chairman, José Carrión, wrote to the Governor and legislative leaders stating that, in order for the budget to take effect, the Legislature would have to make adjustments to certain unspecified special appropriations measures. This announcement further enraged the legislative minority, already upset that the budget had not been made public despite being sent to the FOB more than a month prior to Roselló’s speech at the Capitol.

In his budget message, the Governor promised retirees that the government would fully pay for public employees’ pensions. He also promised to cut taxes and phase-out the Business-to-Business (B2B) tax, among other measures. He also promised to pursue tax reform, though he did not provide details. If the budget is approved by the Legislature and ultimately certified by the FOB, it will be Puerto Rico’s first budget under PROMESA and the Board’s jurisdiction. The new fiscal year starts on July 1.

UPR strike over, classes to resume next week

A University of Puerto Rico (UPR) Río Piedras Campus student assembly approved a resolution ending a strike that has kept the campus closed since March 28. The other 11 campuses that were on strike have already ended the strikes that paralyzed the Commonwealth’s public university system. The students, who kept the university gates closed during a protest of the FOB’s $512 million in UPR budget cuts, also continued their demands for a full audit of Puerto Rico’s $70 billion debt and said they would continue to fight the budget cuts to the UPR.

Board’s approval rating slips to 43%; June 11 referendum to move forward

A Survey conducted by El Nuevo Día newspaper indicated that the FOB’s approval rating in Puerto Rico has dropped from 62% in the fall to 43% in May.

The same survey found that, despite a generalized disinterest and an organized boycott by opposition parties, 72% of Island voters intend to vote in this Sunday’s plebiscite on Puerto Rico’s future relationship with the United States. The June 11 referendum will ask voters if they want Puerto Rico to become the 51st US state, become independent or have a free association treaty with the U.S., or maintain its current territorial status.

The Governor has decided to go ahead with the vote despite its cost, and despite pleas by the U.S. Department of Justice to postpone the vote until it has had a chance to review amendments to the ballot language. Approval of the language by the Attorney General would mean $2.5 million in federal funding for the referendum. Although Statehood is widely expected to win, the real questions are: how many voters will turnout, and will Congress act on the results? The pro-Commonwealth Popular Democratic Party (PDP), the Puerto Rican Independence Party (PIP), and the Working People’s Party (PPT in Spanish) are all boycotting the referendum because, among other stated reasons, they were not given the opportunity to participate in crafting the ballot language.

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