Oversight Board urges Senate to address rum tax and trust fund in FY2027 budget talks

By THE STAR STAFF

The Financial Oversight and Management Board for Puerto Rico has responded to Senate President Thomas Rivera Schatz’s recent inquiries about the use of federal rum excise tax revenues and the Puerto Rico Trust Fund to pay the pensions of Puerto Rico Electric Power Authority retirees, signaling that any changes to these funding streams should be considered during the upcoming Fiscal Year 2027 budget process.

In a letter dated December 26, 2025, the Board acknowledged the importance of both the rum cover-over program and the Trust Fund to the island’s fiscal framework and long-term sustainability. However, it emphasized that current laws and regulations restrict how these revenues can be spent.

The Board proposed that any new obligations or modifications to existing ones be discussed as part of broader efforts to reform Puerto Rico’s budgetary and financial statutory framework. “By discussing these initiatives within the formal budget development process, we can ensure that any decisions consider Puerto Rico’s overall financial situation and are fully aligned with long-term fiscal objectives,” the letter stated.

The Oversight Board expressed appreciation for Rivera Schatz’s engagement and invited continued collaboration to achieve a more transparent and sustainable fiscal system for Puerto Rico.