P.R. gov’t adjusting budgets to bridge revenue shortfall
The government of Puerto Rico is making budget adjustments amounting to some $254 million, which is about half of the shortfall in revenue collections the Treasury Department anticipated late last year.
In a news conference at La Fortaleza, Luis Cruz, executive director of the Office of Management and Budget, confirmed a reduction in the budgets for agencies offering health, security and education services.
The government will also not be making payments to the Commonwealth retirement system and will clawback about $119 million in revenue that was supposed to be directed for payments on the Puerto Rico Infrastructure Financing Authority debt.
“In light of the reduction in revenue collection estimates, the budget for Fiscal 2016 will be $9.2 billion, instead of $9.8 billion. The expenses that were authorized in the original budget will not occur now,” he said.
In the case of education, the government is shaving off $10 million in assignments that were earmarked for third-sector entities that provided services to the Education Department, he said.
In the area of security, several components — Police Department, Corrections, Justice, National Guard, Forensics Sciences, and State Emergency Management — will see about $24 million less in their combined budgets.
In the area of social services and health, the Health Department and its umbrella agencies will get $16 million less, while the government will reduce the contribution to the Commonwealth’s retirement systems to $40 million from $60 million.
“This was an additional contribution the government made to guarantee that services weren’t affected on the mid- and long-term,” he said. “But the truth is that a dollar that is not contributed today, is a dollar that will have to be contributed tomorrow.”
Economist Vicente Feliciano, president of Advantage Business Consultant, said the government’s move will have an economic impact, but ultimately, the reduction in government expense is not that significant.
“That adjustment also calls for not paying debt, so the reduction in government expenditures is not that much,” he said.