PROMESA Board Meets to Discuss Governor’s Turnaround Plan

Puerto Rico Governor Alejandro Garcia Padilla’s deadline for a turnaround plan was October 14th, and on Friday the fiscal oversight board met to examine the Fiscal and Economic Growth Plan (FEGP) of the Central Government

The governor’s related address to the board focused on the difficulties Puerto Rico faces and on the efforts his government has made to fix the problems. “In the face of the largest municipal bankruptcy in history,” he said, “we have managed to guarantee essential services.”

The address continued with a plea to the board not to give in to “pressure” to focus on austerity rather than prioritizing the needs of the people of Puerto Rico.

“Puerto Rican children and retirees are not to blame,” the governor said, “for careless decisions made here in New York by the rating agencies who supported the close to 32 billion dollars in debt issued by the two previous administrations or the mistaken decisions by Congress to repeal section 936 of the Internal Revenue Code and remove Puerto Rico’s eligibility under Chapter 9 of the Bankruptcy Code.”

Read more about section 936 here.

The address, as well as documents submitted to the board earlier, emphasized the budget cuts Puerto Rico has already undertaken.

The turnaround plan assumes that the inequities in medical funding between Puerto Rico and the States would be corrected, that Puerto Rico’s economy will continue to decline, and that new tax incentives for industry will be created by Congress.

Nonetheless, the plan also predicts that the shortfall, the gap between the amount of money Puerto Rico would need to pay off debts and the amount of money that will actually be available, will be larger than previously reported, the tune of 15 billion dollars. Caribbean Business reports that the governor did not provide the financial details requested at the last meeting of the board. The board requested additional financial information during the latest meeting.

“We did our part,” the governor said in response to questions from the board.

Protesters attended this meeting, as well as the initial meeting of the board. However, a recent  poll from Puerto Rico’s largest newspaper, El Nuevo Dia, shows that 69% of respondents support the PROMESA oversight board, up from 46% last June. The poll also found that 72% of respondents know little or nothing about the board.

Check out the oversight board’s website.