Puerto Rico board approves $10B budget as resignations loom

Puerto Rico board approves $10B budget as resignations loom

SAN JUAN, Puerto Rico — Puerto Rico awoke to a new budget approved early Wednesday that largely suspends austerity measures and government cuts for one year as the U.S. territory struggles to recover from hurricanes, earthquakes and the pandemic.

A federal control board that oversees Puerto Rico’s finances approved the $10 billion budget after rejecting a different one that Gov. Wanda Vázquez recently submitted and contained numerous incentives and spending increases that critics say were unrealistic.

Puerto Rico’s 2021 consolidated fiscal year budget is 10% bigger than last year’s, mainly because it anticipates a 17% increase in federal funds. The majority of spending targets health care, education and government pension payments, while areas including housing and agriculture will see cuts.

The budget also contains $83 million worth of incentives in the general fund, including awards ranging from $5,000 to $100,000 for schools that meet certain requirements including teacher and student attendance.

José Carrión, the board’s chairman, said it’s the fourth consecutive year that Puerto Rico’s government has submitted a budget inconsistent with a fiscal plan that serves as the island’s economic blueprint.

“There can’t be spending we can’t afford,” said Carrión, who announced he is stepping down in early October after serving on a voluntary basis since the board was created four years ago.

Puerto Rico remains mired in a deep economic crisis as it restructures a portion of its more than $70 billion public debt load created by decades of mismanagement, corruption and excessive borrowing to balance budgets. The board has said it expects to complete the bankruptcy-like process this year.

Board members said they largely suspended austerity measures and government cuts to allow Puerto Rico’s government to impose long sought-after reforms, including increasing the local labour participation rate, making it easier to do business on the island and providing cheaper and more reliable electricity.

During a two-hour meeting on Wednesday to talk about the budget, several board members chastised Puerto Rico officials for not presenting audited financial statements since 2017.

“It’s really disheartening,” said board member Carlos García, who also announced he is stepping down in late August.

Congress created the board in 2016 as part of a law known as PROMESA that a group of Democratic legislators are pushing to amend, saying the board has not done enough to protect Puerto Ricans and improve the island’s economic situation.

In a statement announcing his resignation, Carrión said that while the law is not perfect, it can continue to help Puerto Rico.

“PROMESA was and is an imposition upon Puerto Rico by the federal government,” he said. “However, it is also a life preserver and a tool that has saved Puerto Rico from drowning in a sea of debt.”

DáNica Coto, The Associated Press

Puerto Rico

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

robbery
UPDATE: Suspect identified in early morning shooting

Rimbey RCMP had responded to a complaint of an armed robbery at the Bluffton City General Store

Health Minister Tyler Shandro and Dr. Deena Hinshaw, the chief medical officer of health, receive flu shot. Photo via Government of Alberta
COVID-19: One more death in central zone

Ponoka County on province’s watchlist

Many rural municipalities were concerned about a proposed reduction to their industrial revenues, but Alberta’s Municipal Affairs minister has come up with an alternative solution. (Photo contributed)
Province and rural municipalities agree on a plan to support Alberta’s energy industry

Creating new wells or pipelines would result in a three year ‘tax holiday’

The influenza vaccine will be available at no cost starting Monday in Alberta. “The more that we can avoid influenza-related tests, emergency visits and hospitalizations, the stronger our system will be to support those with COVID-19 and all other health needs," says Dr. Deena Hinshaw, the province's chief medical officer of health. (AP Photo/Ted S. Warren)
Hinshaw urges Albertans to get flu shot as COVID cases jump by 332

Alberta’s central zone now has 132 active COVID-19 cases

The Bellows family on vacation last year in Mexico. L-R: Angel, Ryan, Darrel, Grace and Michael. (Photo submitted)
Rimbey community rallying behind family after cancer diagnosis

Michael Bellows, 12, a ‘strong, resilient kid’ says father

In this photo provided by Shannon Kiss, smoke from the CalWood Fire billows, Sunday, Oct. 18, 2020, as seen from Gunbarrel, Colo. (Shannon Kiss via AP)
‘First guys out:’ Western Canadian air tanker fleet busy despite drop in wildfires

CEO believes wildfires have become more dangerous in recent years as people live closer to where they start

A passer-by walks past a COVID-19 testing clinic in Montreal, Friday, Oct. 16, 2020. THE CANADIAN PRESS/Ryan Remiorz
Canada ‘yet to see’ deaths due to recent COVID surge as cases hit 200,000

Much of the increase in case numbers can be attributed to Ontario and Quebec

Executive Director of Agape Kate Halas (left) receives $1000 from Sgt. Eric Christensen (right) on behalf of Agape. Photo/ Shaela Dansereau.
Former Wetaskiwin Peace Officer wins provincial award; gives back to Wetaskiwin community

Eric Christensen has won the Alberta Association of Community Peace Officers Award of Excellence.

Agriculture Minister Devin Dreeshen (Alberta government photo)
Big boost for Alberta college agriculture research

The $2-million agreement to benefit Lethbridge College’s applied research team

Grant and Barbara Howse, in quarantine in Invermere. Mike Turner photo
Denied entry into U.S., Canadian couple still forced to quarantine for 2 weeks

The rules around crossing the U.S. border led to a bizarre situation for an Invermere couple

Employee Sophia Lovink shows off a bag of merchandise in Toronto on Thursday, June 11, 2020. (THE CANADIAN PRESS/Nathan Denette)
Canada gets C-average grade on 2nd year of cannabis legalization

Cannabis Council of Canada releases report card on federal government and legalization

Canadian and American flags fly near the Ambassador Bridge at the Canada-USA border crossing in Windsor, Ont. on Saturday, March 21, 2020. Restrictions on non-essential travel between Canada and the United States are being extended until at least Nov. 21. THE CANADIAN PRESS/Rob Gurdebeke
Non-essential travel restrictions at Canada-U.S. border extended to at least Nov. 21

The restrictions do not apply to those providing essential services in either country

(The Canadian Perss)
Banff wolves have lower survival rate due to hunting, trapping outside park boundary

Researchers looked at 72 radio-collared wolves in the national park from 1987 to August 2019

Democratic presidential candidate and former Vice President Joe Biden speaks at Miramar Regional Park in Miramar, Fla., Tuesday, Oct. 13, 2020. Alberta Premier Jason Kenney is still hopeful about the Keystone pipeline if there’s a change in government in the U.S. next month, saying Alberta has been engaging with American officials from both sides of the aisle. THE CANADIAN PRESS/AP-Carolyn Kaster
Alberta premier says he’s still hopeful about Keystone, even if Biden elected

The Alberta government has agreed to invest about US$1.1 billion as equity in the project

Most Read