Puerto Rico Governor-Elect Ricardo Rossell- this weekend declined the governor's offer to work on a fiscal plan for the oversight board.
As part of the Puerto Rico Oversight, Management, and Economic Stability Act Puerto Rico's governor was required to submit a five year plan that, among other things, lists steps to bring about fiscal responsibility, regain access to capital markets, fund essential public services, fund provisions, and achieve a sustainable debt burden.
In mid-October Gov. Alejandro García Padilla presented a 10 year plan to PROMESA's Oversight Board that said, among other things, that the commonwealth couldn't afford paying any debt without federal aid. In this version, the government would be still $6 billion short for operating expenses over 10 years without federal help and without paying any debt service.
In mid-November Oversight Board members indicated they believed substantial cuts to Puerto Rico government spending beyond those included in the governor's plan were necessary. The board said it expected a revised version of the plan from the governor by Dec. 15.
In response to the board members' statements, García Padilla said he would not cooperate in revising the plan to include additional austerity. Puerto Rico has had enough austerity, he said, and further budget cuts would only lead to an "economic death spiral."
On Friday the governor sent a letter to Rossell- inviting him to join with the governor in revising the fiscal plan. That way the governor-elect's fiscal proposals would be incorporated.
However, on Sunday Rossell- publicly rejected García Padilla's offer. According to the El Vocero news web site, Rossell- said that the governor hadn't released enough financial data for Rossell- to work with him.
Also according to El Vocero, at the news conference that followed the mid-November board meeting, board chairman José Carri-n III said that once Rossell- comes to power in January Rossell- will have the opportunity to amend the fiscal plan but not to present his own version. The board has said it will certify the plan by Jan. 31.
