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  • Writer's pictureThe San Juan Daily Star

Central government needs to find $1.3 billion to finance its priority programs and projects

House Speaker Rafael Hernández Montañez

By The Star Staff

House Speaker Rafael Hernández Montañez pointed out the need to find $1.3 billion to finance priority programs and projects of the central government.

He spoke Monday during the first public hearing to evaluate the government budget for the fiscal year 2023-2024.

The governor’s fiscal team, made up of the heads of the Treasury Department, the Office of Management and Budget (OGP), and the Fiscal Agency and Financial Advisory Authority (FAAFAF), admitted that they face multiple challenges in negotiations with the Financial Oversight and Management Board (FOMB) to find $600 million to finance Governor Pedro Pierluisi’s proposed tax reform.

Another challenge is to stop budget reductions for the 78 cities.

The fiscal team expressed that it is trying to convince the FOMB to allocate the $120 million to the Municipal Essential Services Fund for the cities and to stop the contribution of $160 million that the Municipal Revenue Collection Center (CRIM) currently pays to the Health Insurance Administration (ASES).

They also said they are trying to stop a cut of $50 million to the Equalization Fund for the municipalities.

Hernández Montañez also noted that one of the main challenges is to mitigate a difference of $300 million in the matching of the Vital Plan health insurance plan after the request for reimbursement to the general fund by the FOMB.

“Finally, another big challenge is finding funds for the second part of the Classification and Compensation Plan, which amounts to $70 million annually and will make the adjustment for years of service to public employees,” the legislative leader said.

“All these challenges, which add up to $1.3 billion, are the reason why the FOMB has not yet certified a Fiscal Plan. Instead, the government, after reaching an agreement with the Board, will present its version of the budget to the Legislature before May 5,” he said.

He noted the need for the Legislature and the governor to discuss the distribution of funds.

“It is essential to know the amount of funding needed to maintain government operations, based on known fiscal challenges, changes in the administration of Medicare and Medicaid; specifically the need to identify $1 billion for health,” said Treasury Committee Chairman Jesús Santa Rodríguez.

The public hearings of the Treasury Committee for the evaluation of the budget for the fiscal year 2023-2024 will continue on March 23 with the Department of Education.

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