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  • The San Juan Daily Star

House majority to bring bill to amend budget up for a 2nd vote

House Speaker Rafael Hernández Montañez

By The Star Staff

After the measure was defeated last week, the island House of Representatives plans to bring House Joint Resolution (HJR) 278, which would amend the budget for the fiscal year that ends June 30 to allocate money to pay bondholders and creditors as part of the debt adjustment plan, to a second vote on Tuesday.

House Speaker Rafael “Tatito” Hernández Montañez blamed the delegations of the New Progressive Party (NPP), the Puerto Rican Independence Party, the Citizen Victory Movement and the Dignity Project for the defeat of salary raises for public workers included in the measure, after the minority parties voted against HJR 278. Now, the Financial Management and Oversight Board can approve its own version of the budget as established by the Puerto Rico Oversight, Management and Economic Stability Act (PROMESA).

HJR 278 includes an allocation for fiscal year (FY) 2022 from the General Fund of $12.4 billion and a payment of $10.9 billion to comply with the government debt adjustment plan for a total of $23.2 billion. It also establishes yearly debt service payments of $1.5 billion. The resolution also created a $50 million pork barrel fund to be distributed by lawmakers.

“The Legislature had until February 11 to present to the Financial Oversight and Management Board its version of the budget modification in compliance with federal statutes. However, by [minority lawmakers] voting against HJR 278, they [the oversight board] will continue the procedures in accordance with Section 202 of PROMESA, which gives them the authority to approve budgets and fiscal plans,” Hernández Montañez said. “That is to say: At the end of the day, the board, as established by PROMESA, has the power to certify the necessary money if the Legislature does not act.”

In a public hearing last week, Treasury Secretary Franciso Parés Alicea certified that collection projections, after complying with the debt restructuring, provided for an additional $800 million.

“And in a responsible manner, the Popular Democratic Party [PDP] delegation unanimously amended the budget resolution during the session to allocate money to do salary justice to public employees, with recurrent funds,” Hernández Montañez noted.

The measure will be reconsidered on Tuesday, given that a member of the PDP delegation could not attend last week’s session due to family commitments.

“The prudent thing now is for the NPP to reconsider its vote and that, in the same inclusive way as Act 53 was approved to establish the rules on how to restructure the debt, let us jointly approve the changes to the budget to comply with due process,” the House speaker said.

Judge Laura Taylor Swain recently approved a debt adjustment plan for the central government that would restructure some $33 billion in debt. Officials hope to implement the plan by March 15.

Last week, PDP Rep. Luis Raúl Torres Cruz charged that the resolution contained a poison pill that seeks to deprive Puerto Rico Electric Power Authority (PREPA) workers of their pension rights.

Hundreds of PREPA employees went to work for other government agencies after the management of PREPA’s transmission and distribution system was taken over by the private consortium LUMA Energy last year. Those workers were slated to keep their pension benefits.

“After careful evaluation of what is stated in this resolution, it is obvious to me that the board’s intention is to deprive PREPA employees who went on to work for other agencies through the mobility process of their acquired rights to retire from the Retirement System of PREPA Employees …” Torres Cruz said. “This is what can be interpreted from what is established in Section 11 of HJR 278.”

The lawmaker noted that Section 11 of the resolution is related to PREPA’s pension system. The legislation states that the funds that the Office of Management and Budget must allocate to the PREPA employee pension fund will only be released after the Fiscal Agency and Financial Advisory Authority provides, to the satisfaction of the oversight board, a formal written legal opinion that identifies the legal basis to support allowing former PREPA employees who were transferred to the central government to continue to participate in PREPA’s retirement system. The board believes the PREPA workers should be enrolled in the Defined Contribution pension plan established by Act 106 of the Commonwealth. Torres Cruz said that goes against the language of Act 120 of 2018, the Law to Transform the Energy System.

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