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The Financial Oversight Board is optimistic about Puerto Rico's new operating budget

The Financial Oversight Board is optimistic about Puerto Rico’s new operating budget

Although Operating budget Approved by Financial Supervisory Board (JSF) is less than last minute approval Legislature, Funding for the current fiscal year will not leave municipalities in dire straits as they focus on core agency programs. Department of Educationand allow permanent work to resumeThis was revealed at the creature’s brief public meeting yesterday.

At the conference, the officers of the Board, who now preside over the budget processes and implementation of financial plans in the absence of the Permanent Executive Director, After restructuring the federal government’s debt, it can invest in capital improvements and improving wages and services for the people..

when Ginorli MaldonadoThe central government’s budget director at the board promised additional money to municipalities. Public Finance His counterpart in infrastructure, compared to what was allocated a year ago, Alexander FigueroaFor the first time, it highlighted that the board was able to approve the budget Water and Sewerage Authority (AAA) was filed.

Figueroa acknowledged that the improvement rested on “modest” annual increases used by the public company and represented $252 million in additional revenue out of consumers’ pockets between 2018 and 2022.

And it was Cooperative Insurance and Supervision Corporation (Kosek), highlighted that, for his part, Maria LopezDirector of Pensions, Cossec and The University of Puerto Rico (UPR) in JSF.

There was more time

At the end of the general meeting, the chairman of the assembly Mr. David SkellAfter granting several extensions to the legislature, the body approved the budget.

Skeel lamented the consensus process a year ago between Govt Peter PierluzziAssembly and Board.

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The director expressed the same regret Antonio Medinawho did not attend the meeting, but said in a written message – which Scheel read – The behavior of the political class around the budget last week was similar to the decisions that drove Puerto Rico into bankruptcy..

Scheel denied that the lack of a permanent executive director had hampered efforts to get the budget approved.

“We extended the time (for budget submission) four times and we were not flexible,” the bankruptcy law expert said.

According to letters from the board, the Assembly was supposed to approve the budget on June 14, and the date was repeatedly postponed to June 25.

“The table is not complete,” said Jaime El Khoury, the board’s general counsel.

The latter refers to Section 202 Federal law promisesParagraph that modified the approval of budgets from the visit of the Board.

Skeel was optimistic that the revenue and expenditure plan that took effect yesterday would result in a second balanced budget, in accordance with Section 209 of PROMESA.

The consolidated budget for the fiscal year just begun is about $28,000 million, of which $12,426 million was charged to the general fund.

1367 plan

The board approved the budget last Thursday around 5:00 p.m House of Representatives Agreed to negotiate with Senate. This was an additional $49 million allocated to the general fund budget.

In parallel, Pierlusi signed Bill 1367, which created an alternative regime to the so-called 4% excise tax, an important part of the public finances. Although the signature of the project – now changed to Law 22 – allows the approval of the budget, German Ojeda, an official of the board, indicated that the measure is being evaluated by the agency.

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For now, Ojeda said, the approved budget rests on less comfortable plans when it comes to taxes paid. Controlled Foreign Companies (CFCs in English).

Until next January, CFCs will not be able to claim the said fee on their federal returns, which now depends on the US Treasury’s approval of the changes made to the regime with Plan 1367.

Budget balance

Regardless of who approves it, the current budget will be the second to include public debt payments, Scheel said.

Last February, the board amended the last budget to include the results of the central government’s financial restructuring and the confirmation of the Plan of Adjustment (PDA).

Skeel explained that until the fiscal year 2022 financial statements and the end of the cycle that begins now, both fiscal years will be the first two balanced budgets in light of PROMESA.

“We won’t know until the financial statements are audited,” he said.

Now, the government has released the audited financial statements up to 2019.

At the thirty-sixth general meeting, the Directors and Officers of the Board presented a summary of the budgets of the Central Government, PRASA, Electricity Authority (ESA), The Industrial Development Corporation (Bridco, in English), Kosek et al Sales tax finance company (Cofina).

Continuity with the Legislature

In short, each year, the board must provide the government with a plan of revenue and a work schedule so that the executive branch can present a budget for the agency’s consideration and a period of time to identify and correct potential violations of financial plans. In this process, the Legislature also establishes a timeline for its analysis and approval.

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El Khoury explained that the approval date established in the budget approval calendar assumes that the board has one last turn to verify that what is approved by the legislature is consistent with the current financial plan.

According to letters from the board, the Assembly should have approved the budget on June 14, the date postponed by a week at the request of the Senate President. Joseph Louis Talmau. As the new approval date set for June 22 was not met, the board extended two more days without success. Last Monday, the board gave a fresh chance and passed the budget yesterday before the Assembly adjourned and gave the certificate.

Those approved by the organization represent a large portion of the government’s budgeted spending, Scheel said.

During his speech at the conference, Governor Pierluisi agreed with Scheel but opposed the board’s stance on funding municipalities, and the body does not approve funding for specific projects. He acknowledged that these are very small allocations in a budget of about $28 billion.

The President said that he expects to achieve savings throughout the fiscal year in order to fulfill projects that have been abandoned without funding, and asked the House to take action every time it requests from him to reallocate budget funds from an item. For others..