• The Star Staff

Governor takes fight with fiscal board over unspent money to US Supreme Court

By The Star Staff

Gov. Wanda Vázquez Garced told the U.S. Supreme Court recently that the Financial Oversight and Management Board’s (FOMB) opposition to allowing the Puerto Rico government to reprogram unspent money from earlier years to pay for unapproved expenditures is not just a question of pre-emption.

The governor made her remarks in a brief filed July 31. She was responding to an oversight board’s brief on July 20 in which it defended the First Circuit Court of Appeals ruling that the elected government had no right to spend money that wasn’t approved by the board, even if it was using unspent money from prior years.

The board argued that federal law also gives it the right to make budget decisions and override the local legislature and governor.

Vázquez replied that the oversight board was trying to obscure the importance of the questions presented in the government’s petition, which are critical both to the debt restructuring process and the island’s system of self-government.

By framing the case as a “routine” question of pre-emption, the government said the oversight board was ignoring that the U.S. First Circuit Court of Appeals’ entire pre-emption analysis turned on one of the key questions the government’s petition presents, namely whether the Puerto Rico Oversight, Management and Economic Stability Act (PROMESA) bans reprogramming requests for unspent funds from prior fiscal years.

“The First Circuit reached the issue of pre-emption only because it concluded that PROMESA imposes such a ban,” the governor said. “Tellingly, while the opposition contends that PROMESA on its face prohibits ‘reprogram[ming] unspent appropriations from prior budgets,’ the Opposition nowhere quotes the language in PROMESA instituting such a ban. That’s because there is none. That is one critical reason why this Court should review and reverse the First Circuit’s decision.”

The government also noted in the brief the importance of the Supreme Court reviewing the decision because it goes into the vital powers of Puerto Rico. The government contends that the dispute boils down to whether the oversight board has the power to be an entity above the government of Puerto Rico, not within the government.

“The Oversight Board exposed its shockingly colonialist interpretation of its statutory powers in arguing that PROMESA does not even require the Oversight Board to ‘work together’ with the elected government on fiscal policy,” the government said.

“Of course, that is wrong. Numerous PROMESA provisions require the Governor first to draft fiscal plans, budgets, and other key PROMESA documents for the Oversight Board’s review. Nothing in PROMESA allows the Oversight Board to adopt any document binding on the elected government without first providing the elected Government an opportunity to present its own plan,” the government said. “PROMESA crafted a delicate power sharing arrangement, because Congress was aware it was infringing upon Puerto Rico’s framework of self-government. Due to that extraordinary fact, the powers of the Oversight Board should be narrowly construed.”

The case is Wanda Vazquez vs. FOMB.

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