Fortuño proposes $9.082B budget for Fiscal ’13
Gov. Luis Fortuño unveiled Tuesday a $9.082 billion general fund budget proposal for fiscal 2013, representing a 2 percent reduction from the $9.260 billion budget in effect through June 30. The public finance strategy is to be fully broken down this afternoon, during the final budget speech the governor will deliver this term at the Capitol.
In a meeting earlier in the day with reporters from several Puerto Rico media outlets, Fortuño said the proposed budget for next fiscal year that begins July 1 will focus on three areas: education; public safety and health.
Education stands in line to get $3.5 billion, to “increase by 5 percent the amount destined to the classroom to $3,278 per student,” said Fortuño. However, the proposed amount represents a $161 million reduction from the current budget, accounting for the end of non-recurring American Recovery and Reinvestment Act allocations and normal federal fund reductions.
Included in that assigned amount is $286 million for special education, $113 million for transportation, $56 million for security in public schools, and $52.2 million for the University of Puerto Rico. The government’s institutional program “Tus valores cuentan” (“Your values count”) will get a $1 million boost to $4 million, to “reach more schools,” he said.
Fortuño placed special importance on his administration’s proposed “Bilingual Generation” program, for which it will redirect agency for an August launch. The goal, he said, is to align teachers and the curriculum to produce fully bilingual high school graduates within the next decade.
In the area of public safety, the budget proposes a $1.387 billion allocation, split between $808 million for the Police Department — representing a $39 million increase — $59 million for technology, vehicles and other equipment, $417 million for the Corrections Department, and $162 million for the Justice Department.
The proposed earmarks for the Police and Justice Department would cover salary increases at the former, and hiring additional staff at the latter, Fortuño said.
The fiscal 2013 budget calls for assigning $3.083 billion to the area of health, divided into $826 million for the Health Department and $2.257 million for the government’s “Mi Salud” public health program. The goal, Fortuño said, would be to add 50,000 new beneficiaries to the program to push the total number of insured to more than 1.6 million.
17% drop in spending
The proposed general fund budget for 2013 reflects a 17 percent drop in government spending since 2009, when the administration consumed $10.890 billion. Furthermore, the proposed general fund budget reduces the government’s deficit by 90 percent when compared to that same year, Fortuño said.
If approved, the public deficit would stand at 3.8 percent, he noted.
‘Meeting revenue estimates’
When broken down, the proposed budget shows the government is doing away with the practice of overestimating revenue, projecting it will shore up $8.75 billion in 2013. To cover the difference between collections and projected spending, the government will dip into the Stabilization Fund, from which it will draw $333 million to cover expenditures next year.
“We’re meeting revenue estimates. We’re responsibly managing the people of Puerto Rico’s finances,” he said.
Government Development Bank President Juan Carlos Batlle explained that the $333 million to be used to cover the difference comes from the 72 percent reduction of the government’s variable debt and reducing the government’s exposure to expensive interest rate swaps.
The government’s fiscal 2013 consolidated budget, which includes federal funds, is expected to be $28.572 billion, half of which, or $14.8 billion, will be earmarked for social development, the governor said.
Another $6.252 billion will be allocated to economic development activity, while public debt service will get a little more than $4 billion in the proposed budget.