Governor proposes referendum to give pension payments constitutional priority
By Pedro Correa Henry
Special to The Star
While the State Elections Commission (SEC) struggles to fund the 2020 general elections, Gov. Wanda Vázquez Garced on Monday announced a Fifth Extraordinary Session in which the Legislative Assembly will address a vote on Nov. 3 calling for an amendment to the Puerto Rico Constitution that would change the order of debt payments to give priority status to the payment of pensions to thousands of government employees.
As Vázquez and the legislative leaders are fighting a proposed 8 percent cut to pensions that are higher than $1,200 a month as part of a preliminary restructuring support agreement on the general obligation debt reached with creditors in February, she said the proposed vote would amend Article VI, Section 8 of the Commonwealth Constitution to give pension payments the same priority as the payment of interest and amortization of the debt.
“In case the available revenues including surplus for any fiscal year are insufficient to meet the appropriations made for that year, interest on the public debt and amortization thereof shall first be paid, and other disbursements shall thereafter be made in accordance with the order of priorities established by law,” says Article VI, Section 8 of the Constitution.
At a news conference in which she was flanked by legislative leaders -- Senate President Thomas Rivera Schatz and House Speaker Carlos Méndez Nuñez, as well as other legislators -- Vázquez said one of the reasons that both the House of Representatives and the Senate were to be summoned was to evaluate the referendum proposal, which would ask if voters are in favor of establishing retirees’ pensions as a constitutional priority. The governor said there is an urgent need to hold a popular vote to avoid what she called “an injustice.”
“It is not a gift,” Vázquez said. “Only after paying the public debt service and the pensions, we will be able to make every [other] disbursement according to the law and the Constitution. This could mean a profound shift in the actual order as that, at the current time, means that pension payments will be left behind and we will only proceed after the government has paid interest and redeemed the debt, the commitments made under legal contracts in effect, court rulings in cases of forced expropriation, and other obligations.”
The proposed constitutional referendum is one of more than a dozen measures the governor included in the list of bills to be evaluated in the special legislative session she is convening, including various bills to amend the award process and payment of submitted claims from healthcare providers to health insurers. After a member of the press asked why the government was presenting the bills now and if there was enough time for the Legislature to evaluate such large-scale proposals when there were others left pending on July 1 after the conclusion of the last ordinary session, Vázquez said that as the government met with various sectors, it was decided to respond to their needs in the midst of the COVID-19 pandemic.
“As for why the bills are being presented now, it is because we had discussions with different groups recently, such as healthcare insurers, retirees, and other sectors that demanded that their needs be met,” she said. “I wanted this extraordinary assembly to focus on bills that benefited patients and healthcare providers. We thought this was the time to do it, and we did it.”
Rivera Schatz added that the extraordinary session would give them enough space to evaluate bills such as the referendum, noting that even though the Legislature surpassed the expected number of approved bills in the ordinary session, when other “high-impact” bills were received at the last minute, other measures were left behind.
“Many of the bills were approved by the House or by the Senate, and what happened was that if we examine the number of laws that were approved in both House and Senate, the numbers surpass those of any other Legislature,” Rivera Schatz said. “Unfortunately, there were some bills that came to us that were intense, as they are of high impact. I couldn’t pretend that the House would approve our bills at the last minute or that the Senate would approve what arrived from them [the House]. If we have an extraordinary [assembly], we give ourselves the space to address these bills.”
Meanwhile, referring to concerns about how the SEC was going to fund the referendum if it were approved, the governor said the government will work to defray expenses as retirees’ rights and their sacrifice would be considered above everything else. Nonetheless, when The Star asked how the SEC would pay for the plebiscite if election commissioners from the New Progressive Party and Popular Democratic Party have suggested that the agency might not have enough in their budget for the general elections, Rivera Schatz said that instead of questioning how much the referendum costs, people should ask how much it costs to defend retirees’ rights.
“Lately, the situation with how much it costs, it should be more how much it costs defending our pensioners, how much democracy costs. Let’s criticize now that we want to delegate, to a constitutional degree, the right to pay retired employees. If you asked how much the referendum costs, ask how much it costs to defend pensioners’ rights,” he said. “There might be different theories: ‘let’s defend our pensions against being cut,’ but our colonial condition limits us. The Financial Oversight and Management Board approved a budget haphazardly. We are telling you that we want the retirees’ pay to have constitutional merit so we don’t end up in the courts, with the argument that the Constitution states that we have to pay all of our debt first and then, if there’s something left, we attend to our pensioners, who are the people who have worked for Puerto Rico for decades. It’s just a question for people to position themselves for or against pensioners.”
The Financial Oversight and Management Board, meanwhile, declined to comment on the bill, stating that it learned about it during the governor’s press conference and did not have sufficient information.