Monday, March 27, 2023

Fiscal oversight board optimistic about Puerto Rico’s new operating budget

Although operating budget Approved by fiscal inspection board (JSF) has less than last minute support Assembly, The funds allocated for the fiscal year that is just starting will not leave municipalities in a precarious position, they insist on major agency projects, such as education Departmentand allow the permanent task to be resumedThis happened yesterday at a brief public meeting of Jeeves.

At the conference, Board officials, who now lead the budget processes and implementation of financial plans in the absence of a permanent executive director, highlighted that, After restructuring the central government’s debt, it can invest in capital reform and in improving wages and services to the population.,

whereas ginorli maldonadoThe director of budget for the central government on the board assured that municipalities would receive more funds general fund Compared to a year ago, their counterparts in infrastructure, Alexander Figueroahighlighted that, for the first time, the Board was able to approve the budget water and sewage authority Filed as (AAA).

This progress, Figueroa acknowledged, rests on “modest” annual growth that the public corporation has implemented and that, between 2018 and 2022, represented some $252 million in additional income that came out of consumers’ pockets. Has come out.

was the same with Co-operative Insurance and Supervision Corporation (Kosek), highlighted, for his part, maria lopezDirector of Pensions, Cossec and University of Puerto Rico (UPR) and La JSF.

it was a long time

At the conclusion of the public meeting, the Chairman of the Board, David Scheelindicated that the body approved the budget after giving several extensions to the legislature.

Scheel regretted that the consensus process between the government a year ago Pedro PierluisicLegislature and Board.

The same regret was sent by the director Antonio Medinawho did not attend the meeting, but in a written message – which Scheel read – said that The behavior of the political class around the budget over the past week was similar to the decisions that led to Puerto Rico’s bankruptcy,

Scheel denied that the absence of a permanent executive director affected the work on getting the budget approved.

“We extended the time (for budget presentation) four times, it was not that we were not flexible,” said the bankruptcy law expert.

According to the board’s letters, the Legislature should have approved the budget on June 14 and the date was repeatedly postponed to June 25.

“The schedule was not met,” said Jaime L. Khoury, the board’s general legal advisor.

Referred to section 202 of the latter federal law promiseThe paragraph that revised the approval of the budget since the board’s arrival.

Scheele was optimistic that the revenue and expenditure program that goes into effect tomorrow could become the second balanced budget, as required by Section 209 of Promesa.

The consolidated budget for the fiscal year that has just begun is approximately $28,000 million, including a budget of $12,426 million for the General Fund, including that figure.

1367 Project

The board approved the budget last Thursday at around five in the evening. Lok Sabha approved to interact with managing committee, It allocated an additional $49 million to the general fund budget.

In parallel, Pierlucci signed Bill 1367, which created an alternative arrangement for the so-called 4% excise duty, which forms a significant portion of public finance. Although the signing of the project – now converted to Law 22 – allowed budget approval, German Ojeda, an official on the board, also indicated that the measure is evaluated by the agency.

For now, Ojeda said, the budget that was approved rests on less comfortable estimates when it comes to paying taxes. controlled foreign corporation (CFC in English).

As of next January, CFCs will no longer be able to claim the said payment in their federal returns, which now depend on the US Treasury backing the regime changes made with Project 1367.

budget balance

Regardless of who approved it, Scheel said, the current budget will be the second to include public debt payments.

Last February, the board amended the final budget to include the results of the central government’s financial restructuring and ratification of that adjustment plan (PDA).

Scheel explained that it will not be until the fiscal year 2022 financial statements and the cycle that has just begun, that it can be confirmed whether both fiscal years will be the first two balanced budgets in light of Promesa.

“We won’t know until the financial statements are audited,” he said.

Currently, the government has published the audited financial statements up to 2019.

During the thirty-sixth public meeting, the Board of Directors and officers presented a summary of the Union Government’s budget, PRASA, electric power authority (EEA), industrial development company (Predco, in English), Cossec and the sales tax fund corporation (Coffina).

saga with legislature

Briefly, each year, the board must provide the government with a projection of revenue and submit a work schedule so that the executive branch submits a budget for the agency’s consideration and to identify and correct potential breaches of financial plans. Enter the period of time. In this process, the time that the legislature will have for its analysis and related approval is also established.

El Khure explained that the approval date established in the calendar for the approval of the budget assumes that the board has a final turn to verify that what is approved by the legislature is in line with the current financial plan.

According to the board’s letters, the legislature should have approved the budget on June 14, a date that was postponed by a week at the request of the Senate president, Joseph Louis Dalmau, In view of the non-compliance with the new approval date set for June 22, the board gave two more days without any success. Last Monday the board gave a new chance and, before the inaction of the legislature, yesterday, the body adopted and ratified the budget.

Scheel said that what was approved by the body represents a substantial part of the budget spending by the government.

During his intervention at the convention, Governor Pierluci agreed with Scheel, but objected to the board’s position regarding funding of municipalities, and also that Jeeves did not approve funding for specific programs. These are very few allocations in the budget of about $28 billion, he acknowledged.

The President projected that he expected to achieve savings throughout the fiscal year to avoid those projects being left without funding, and asked the Board to receive a request to reallocate budget funds from one item each time. asked to work together. to another..

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