Governor to deliver first post-debt restructuring state of the commonwealth speech today
By The Star Staff
Gov. Pedro Pierluisi Urrutia is slated to deliver his state of the commonwealth address to the island Legislature today.
The speech comes amid problems plaguing his administration such as illegal construction in a protected coastal area of Salinas, erosion along parts of Puerto Rico’s coast and complaints from mayors that they are not receiving federal funding for infrastructure work fast enough.
It also comes when efforts to achieve statehood or get legislation approved have failed and the process of putting Puerto Rico Electric Power Authority assets under private management have not fulfilled expectations as consumers are bracing for a temporary rate hike.
Pierluisi presented a measure on Monday that seeks to address the significant increase in the cost of oil that has caused a hike in the price of gasoline, as a consequence of the war between Russia and Ukraine.
“In the spirit of seeking immediate solutions to the crisis in the sharp increase in oil and gasoline prices as a result of the war in Ukraine, I am presenting an administration measure that seeks to pause the collection of the excise tax for 45 days,” the governor said. “But this same initiative identifies the source of repayment to cover the fiscal impact, which follows the principle of fiscal neutrality established by PROMESA [the Puerto Rico Oversight, Management and Economic Stability Act].”
The Financial Oversight and Management Board previously opposed a similar measure.
The governor’s speech will be the first state of the commonwealth address since the government restructured its $33 billion central government debt. The debt adjustment plan has been criticized by retirees and teaching groups, which will see their pensions impacted.
It also comes two weeks after he unveiled a budget for fiscal year 2022-2023 that amounts to $28 billion, including $12.5 billion corresponding to the General Fund and $4.9 billion in special funds. The proposed budget also should have $11.2 billion in federal funds.
It also comes as President Biden announced parity in funding for Puerto Rico in Medicare and Supplemental Security Income in his proposed budget for the federal fiscal year 2023.
“We are facing a new scenario, a new era, in which we leave bankruptcy behind and focus on meeting our obligations,” Pierluisi said earlier this month. “Now, we focus on improving the quality of life in Puerto Rico and promoting the economic development of the island. After years of receiving cuts and budget reductions, this year we can once again invest in Puerto Rico and in our human capital.”
The General Fund items are subdivided into $5.4 billion for operating expenses, $3.3 billion in payroll expenses, $22 billion in pension payments, $1.1 billion for the Pension Reserve Trust, $771 million in debt service, $413 million in professional services and $268 million in capital expenditures.
The speech will take place at 5 p.m. and will be aired on WIPR.