Puerto Rico Gov. Ricardo Rossell-'s office blasted the president of the University of Puerto Rico for failing to provide information expected to be used to slash the university's subsidy.
Puerto Rico Secretary of Public Affairs and Public Policy Ram-n Rosario Cortés leveled criticism late Tuesday in a press release from the governor's office.
The letter comes as political tensions spread amid efforts to boost the economy and restructure the island's debt under a Puerto Rico Oversight Board appointed last year. On Sunday Rossell- sent a letter to the Oversight Board that neither it nor the legislature would accede to the board's demands for prior review of legislation.
UPR has $432 million of debt outstanding. Its debt is rated Ca by Moody's Investors Service. According to Municipal Market Analytics, UPR drew on debt service reserves to make its Jan. 3 debt payment.
"We urge the UPR interim president to devote her efforts to working for the university instead of lying to the people," Rosario Cortés said, according to the press release.
UPR has "consistently refused to deliver what is known as the 'working spreadsheet,' which specifically details the items that will have an impact on the fiscal adjustment," Rosario Cortés said.
Rosario Cortés said that interim president Celeste Freytes hadn't released financial information to the Financial Advisory Authority and Fiscal Agency, which needs it for Rossell-'s version of a fiscal plan.
As part of the Puerto Rico Oversight, Management, and Economic Stability Act, a five year fiscal plan is supposed to be adopted. Among other things, the plan is supposed to introduce structurally balanced budgets to the government.
PROMESA's Oversight Board has called for the plan to show a structurally balanced budget by fiscal year 2019 and said this will require a combination of cuts and revenue increases equal to 44% of the current General Fund. The board is seeking a level of revenues and expenses that would allow the government to pay 21% of debt service due in fiscal 2019.
In its Jan. 18 letter calling for this 44% adjustment, the board suggested that a $300 million cut in the commonwealth contribution to UPR should be part of it. To achieve this 27% cut in the current subsidy, the board called for: "moving to means-based tuition via higher per class credit prices, complemented by a more extensive use of federal government financial aid." Second, the board said subsidies could be reduced by, "increasing the number of higher-paying international and mainland U.S. students, alumni gifts and federal grant fund." Finally, expenses could be cut through, "right-sizing faculty and administrative staff, and reducing operating and maintenance costs."
On Wednesday the El Vocero news web site reported UPR president Freytes as saying in the last few weeks she had been presenting financial information to the FAAFA.
The board has directed Rossell- to submit a first draft of a 10 year fiscal plan by Tuesday. The board has told UPR that it has until March 31 to submit a draft fiscal plan.
In a further development of the relationship between Rossell- and UPR, on Wednesday Rossell- signed an executive order directing Puerto Rico government agencies to first consider sending their employees to UPR when they seek to train them. According to Rossell-, the government currently spends $450 million a year on outsourcing. The order "will bring to the university resources that it does not have today and will help mitigate the UPR's limitations and fiscal challenges," he added.
