Despite having received numerous reports from Puerto Rican entities, the PROMESA fiscal oversight board used its first meeting on September 30 to ask for financial information from the Puerto Rican government.
In addition to its request for a turnaround plan from Puerto Rico’s governor, the board requested specific data:
- Weekly cash flow reports, disclosing all revenues received and expenses.
- Monthly breakdowns of bank accounts.
- Monthly and year-to-date compliance with budget.
- Monthly and year-to-date revenues.
- Monthly detailed payroll reports by agency.
- Monthly reports on federal funds disbursed.
- Monthly reports on debt and what has been paid.
- Agency performance and productivity reports with appropriate metrics.
- Quarterly reports on key economic financial and labor statistics.
A number of documents have already been provided to the board by the government of Puerto Rico.
One is a new report from the Puerto Rico Fiscal Agency and Financial Advisory Authority. This report blames Puerto Rico’s financial troubles largely on the loss of Section 936 of the IRS tax code and the loss of population to the States. The report acknowledges that over-borrowing was also a problem. It details the efforts of the territory’s government to stave off the problems and lays out a timeline of the descent into fiscal crisis.
This report also details problems relating to crime, educational challenges, and health care failures. It calls for an extension of Act 154 and equal Medicare and Medicaid funding.
Another report, this one coming from the governor’s Working Group for the Fiscal and Economic Recovery of Puerto Rico, dated September 9th, 2015, is titled “Puerto Rico Fiscal and Economic Growth Plan.” This plan announces that Puerto Rico’s public debt is unpayable and recommends debt restructuring as the best solution. Their report also blames much of Puerto Rico’s economic decline on the end of Section 936. They note the effects of migration from Puerto Rico to the States, and list the cost-cutting measures taken by the government, but acknowledge that “Notwithstanding the Commonwealth’s liquidity-enhancing measures, total debt has grown by approximately 64% since FY 2006.”
Recommendations in this report echo those of the Krueger Report, and include measures such as the establishment of a Puerto Rico specific EITC, a reduction in the minimum wage, and the exemption of Puerto Rico from the Jones Act.
Governor Garcia Padilla also presented some other documents:
- GDB Liquidity Analysis
- 2014 Audited Financial Statement
- Errata Notice
- Comparison of effects of reducing hours of government employees vs. laying off government employees
- Analysis of PROMESA
The governor has promised to meet the October 14th deadline for a turnaround plan.