Fiscal board postpones schedule for developing next gov’t budget
By The Star Staff
The Financial Oversight and Management Board for Puerto Rico is postponing the schedule for developing the commonwealth’s fiscal year (FY) 2022-23 budget until the plan of adjustment (POA) that would restructure some $33 billion in debt is confirmed and the updated fiscal plan is certified, according to a letter.
A letter sent this week by the oversight board’s executive director, Natalie Jaresko, to Senate President José Luis Dalmau Santiago, House Speaker Rafael Hernández Montañez and Gov. Pedro Pierluisi Urrutia states that in light of the POA confirmation proceedings being held, the oversight board will defer sending the budget schedule, FY 2023 forecast of revenues, and FY 2023 budget targets until after the POA is confirmed and the updated Fiscal Plan is certified.
Nevertheless, Jaresko asked the commonwealth government to submit certain information for the FY 2023 budget no later than Jan. 31, 2022, the letter dated Nov. 22 read.
The POA confirmation would prohibit the implementation by the commonwealth of laws seeking to expand benefits for retired government employees, the oversight board said in a press release.
The oversight board asked the U.S. District Court for the District of Puerto Rico to rule that Act 80-2020, Act 81-2020, and Act 82-2020 are preempted under the Puerto Rico Oversight, Management and Economic Stability Act (PROMESA) and are inconsistent with the POA for the commonwealth.
If implemented, the three laws would add certain new benefits to participants in the Employees Retirement System and the Teachers Retirement System that were insolvent when PROMESA was enacted because previous administrations failed to adequately fund the government’s promises to retirees.
The oversight board included Acts 80, 81, and 82 among those commonwealth laws that are preempted in connection with the U.S. District Court’s confirmation order confirming the POA. The Fiscal Agency and Financial Advisory Authority opposes the last-minute inclusion.
The proposed order to confirm the POA would prevent such efforts for a period of 10 years, subject to relief from the prohibition under certain conditions, to ensure the oversight board’s mandate under law to help Puerto Rico achieve fiscal responsibility and to ensure that pension benefits are actually funded.