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Tuesday, April 3, 2018

Governor of Puerto Rico discards plan of austerity

Por Damian

The authority of the federal control board that oversees the finances of Puerto Rico could be put to the test after the governor of the island Ricardo Rosselló recently dared its request for additional austerity measures. The politician rejected the board's request according to which his government should present a revised fiscal plan that includes a labor reform and a 10% reduction in the pension system.

"The board does not have the powers to implement public policy issues. It's that simple, “said Roselló.

The board did not immediately respond to Rosselló's comments, made just hours after he sent a seven-page letter to that organization outlining why he will not implement those and other changes.

"The people of Puerto Rico, after Hurricane Maria, have suffered a lot in terms of reduced government services and economic loss," Rosselló estated in the letter. "Now the board is trying to impose additional cuts to benefits and the retirement of government employees at the worst possible time, when Puerto Rico tries to recover.”

The Category 4 storm caused more than $ 100 billion in damages when it hit the island on Sept. 20, at a time when it was dealing with a severe economic crisis and the reformation of a portion of its public debt of more than $ 70 billion dollars. Even now more than six months after the hurricane came through, 80,000 users are still without electricity.

José Luis Cedeño, spokesman for the board, did not respond to a request for comment. The federal control organization has the authority to approve its own fiscal plan with the changes it wants, but Rosselló said it lacks the power to force him to implement them. "If some of these measures are certified, we will not give it a pass," he declared.

The federal board announced it will approve the government's fiscal plan before April 20 and published letters in which rejected a tax plan for the largest public university in Puerto Rico, as well as for the Highway and Transportation Authority. Likewise, it indicated that the University of Puerto Rico should increase its tuition for each loan from $ 57 to $ 157 before the end of the year, a proposal that local authorities have rejected. In addition, the letters pointed out that the fiscal plan of the Highway and Transportation Authority does not set aside funds for vital projects, and requires a debt sustainability analysis.

Rosselló´s government did not immediately respond to the agency's letters. Yet, the governor has until Thursday to amend and present those two tax plans.