Governor pitches $9.1B budget, reserves $209M for debt

Written by  //  May 24, 2016  //  Government  //  No comments

Gov. Alejandro García-Padilla delivers a televised message to unveil the proposed budget for next fiscal year.

Gov. Alejandro García-Padilla delivers a televised message to unveil the proposed budget for next fiscal year.

Puerto Rico Gov. Alejandro García-Padilla on Monday unveiled a proposed budget for Fiscal 2017 of $9.1 billion, down $700 million from the original budget that was approved last year and $192 million less than the adjusted current budget.

The proposed budget — which must be approved by the Legislature by June 30, the end of the current fiscal year — is based on an actual projection of revenues and includes a reduction in the government’s operating expenses of nearly $3 billion, compared with the last spending budget filed by the previous administration.

“In addition, it anticipates the resources available to the Commonwealth, to safeguard the provision of essential services over upcoming debt payments,” the governor said in a televised speech. “Therefore, it does not reduce budgets for health, education, public safety, agriculture and social welfare, or the formula that calculates the assignments for the University of Puerto Rico, the Judiciary and municipalities.”

That proposed amount is split between $4.1 billion destined for agencies: Education ($1.6 billion), Police Department ($709 million), Department of Corrections ($350 million), Family Department ($301 million), Health Department ($204 million), Treasury Department ($111 million), Justice Department ($102 million), other agencies ($578 million), legislative assembly ($109 million), and fiscally autonomous agencies ($88 million).

The other $4.9 billion will cover special assignments for the University of Puerto Rico ($834 million), municipalities ($361 million), the courts ($315 million), the health card ($885 million), employee retirement systems ($598 million), the Public Buildings Administration ($272 million), emergency fund ($111 million), and other assignments ($776 million).

This portion of the proposed budget sets aside $210 million to pay the interest on debt maturing next fiscal year, but no mention is made of principal payment allocations. The proposed budget also includes $24 million in Tax Revenue Anticipation Notes, to be issued next fiscal year.

“This is how the government seeks to show its good faith with creditors, without having to incurr in laying off staff in essential services such as health and public safety by paying the interest in full,” the governor said.

The proposed budget addresses the consequences of the cash-strapped Government Development Bank, by included a $125 million allocation so municipalities can use the excess of the Special Additional Contribution (CAE, as it is known in Spanish) that is paid along with property taxes, to guarantee that municipalities can continue providing essential services.

The budget also includes $125 million so that other government entities experiencing tight finances who have their deposits at the GDB can use the money, he said.

The governor submitted 11 draft bills breaking down the budgetary allocations.

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