Puerto Rico’s newly approved fiscal plan projects 65% less money available to potentially be used for debt over the next 30 years.

Whereas the Puerto Rico Oversight Board’s April-approved fiscal plan projected a 30 year surplus of central government revenues between $39 billion and $40 billion, the new plan projects a total of about $14.4 billion, board executive director Natalie Jaresko said. The board expects that not all of the money would be used for debt. Some would be used for capital projects.

Puerto Rico Oversight Board member Ana Matosantos in November 2016
Puerto Rico Oversight Board member Ana Matosantos said the failure by the Puerto Rico legislature to pass labor reforms will hurt Puerto Rico's long-term economic growth.

Jaresko made the remarks at a press conference Friday afternoon, before the board approved the plan.

The reduction in money available for debt service is partly due to the Puerto Rico Senate’s decision not to approve revoking Law 80 and thereby establish at-will employment on the island. The board believes a lack of at-will employment will reduce the island’s economic growth over the long-term, impacting the amount of government revenues.

“We will be certifying a revised fiscal plan that does not contain labor reforms and thus fails to achieve the necessary reductions in poverty and increases in household incomes that Puerto Rico’s children need and deserve," Board Member Ana Matosantos said Friday, according to a written version of an oral statement. "This plan requires the elimination of Christmas bonuses for public employees, lower funding for infrastructure, less funding for municipalities and deeper cuts across government including to the judiciary and the legislature. When reforms to increase economic growth are not implemented, unfortunately, more cuts and more controls are needed.”

In a related development, on Friday morning, Senate Pres. Thomas Rivera Schatz released a statement denouncing the board. “At the end of the next fiscal year the board will have cost us approximately $500 million without having resolved anything at all in Puerto Rico. That money could be paid to those who Puerto Rico owes money to, our creditors.”

Rivera Schatz said to board chairman José Carríon, “Stop your agenda of pitting Puerto Ricans against Puerto Ricans.”

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