Puerto Rico governor presents budget with 6.6% more spending

Puerto Rico Gov. Pedro Pierluisi proposed a General Fund budget for the coming fiscal year with 6.6% more spending than the current budget.

On Wednesday Pierluisi said he would seek a $10.713 billion General Fund budget for fiscal year 2022, which starts July 1. By comparison, the Puerto Rico Oversight Board-approved General Fund budget for the current fiscal year is $10.045 billion.

Puerto Rico Gov. Pedro Pierluisi is calling for a 6.6% increase in spending in the coming fiscal year.

Bloomberg News

“The proposal also incorporates public policy priorities aligned with our long-term goals, including eliminating more budget cuts to the University of Puerto Rico, maintaining the current level of support for municipalities to ensure direct services to citizens, complying with the payment of obligatory pensions to government retirees, and implementing the first phase of a true civil service reform that includes a new classification and compensation plan,” Pierluisi said.

Within his proposed budget, Pierluisi is proposing a new allocation of $127 million for the maintenance of highways.

When the board created its first Commonwealth of Puerto Rico fiscal plan in spring 2017, the bulk of the spending cuts were planned to run in fiscal years 2021 through 2023. The board decided in spring of 2020 to postpone most of the cuts that had been planned for fiscal year 2021.

In its July 2020 “Overview of the FY21 Certified Budget,” the board said that the budget, which covers the current fiscal year, “delays by one year most agency rightsizing measures in order to focus on implementation of reforms including financial reporting, technology implementation, agency consolidation, Medicaid reform, and enhancing tax compliance.”

It remains to be seen if the board implements the delayed spending cuts in the fiscal year 2022 budget.

In its May 2020 certified fiscal plan for the commonwealth government, the board projected a FY2022 General Fund Budget of $10.296 billion.

According to the Puerto Rico Oversight, Management and Economic Stability Act, the board has ultimate authority over budgets. It has exercised that authority every year since the first fiscal year it reviewed — fiscal year 2018 — by approving budgets different from those proposed by the governor.

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