In only six months, we have tackled several key challenges faced by Puerto Rico for decades to protect our investment grade ratings. We faced a virtually insolvent retirement system which was shaping up to be a significant burden on the general fund for years to come, a general fund budget deficit of approximately $2.2 billion, and several fiscally strained public corporations such as the Ports Authority, the Puerto Rico Aqueduct and Sewer Authority (PRASA), and the Highways and Transportation Authority (HTA). Despite all these hurdles, we moved swiftly to correct the problems that were weakening our credit rating and restraining Puerto Rico from sustainable economic growth. We feel confident that we have come a long way in completing these major tasks:
• Puerto Rico has delivered on its long-standing promise of enacting meaningful and comprehensive pension reform.
• We have approved a budget for fiscal year 2014 that significantly reduces our general fund deficit by increasing Act 154 excise tax, reducing our reliance of debt service restructurings, and enhancing our sales tax revenue base.
• We have begun restructuring our main public corporations to turn them into self-sufficient entities by increasing PRASA’s rates, closing the concession of the Luis Muñoz Marín International Airport, and providing additional revenues for HTA.
We said that we were going to complete these tasks and we have delivered on our promises. As I stated in the May 2013 Puerto Rico Credit Conference, decisive action has begun to restore the confidence of our people and of our investors. Puerto Rico is back on track and on the right direction.
The Government Development Bank of Puerto Rico is currently working on several transactions and will provide an updated timetable in the next few weeks. We are also working diligently to address the financial problems of the Teachers Retirement System.