Puerto Rico Gov. Alejandro García Padilla has signed a fiscal year 2016 General Fund budget for $9.8 billion.
The governor was constitutionally required to sign the document by the end of Tuesday. His office announced the signature Wednesday afternoon.
The approved budget compared to an approved fiscal year 2015 General Fund budget of $9.565 billion. Unlike previous Puerto Rico budgets, the 2016 plan doesn't rely on long-term borrowing or capitalized interest.
The additional spending is mainly being used for increased debt service and pension payments. The government cut several hundred million dollars from other programs to accommodate the payments. In addition the government is introducing a consumer tax that is 4.5 percentage points higher effective Wednesday to augment revenues.
In Puerto Rico fiscal year 2015 ended at 11:59 p.m. Tuesday. Earlier that day the commonwealth released a financial report estimating that the year would end with a deficit of about $705 to $750 million. The budget had been approved with a $0 deficit.
