Puerto Rico Oversight Board sets out five 2021 goals

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The Puerto Rico Oversight Board set out five goals for major changes in 2021 at Friday's public meeting.

Board Executive Director Natalie Jaresko said the board will work to advance audited financial statements, institute structural reforms in Puerto Rico laws and governance, enact fiscal measures, accelerate recovery from recent earthquakes and hurricanes, and respond to the COVID-19 pandemic’s impact on the island.

Natalie Jaresko
Puerto Rico Oversight Board Executive Director Natalie Jaresko said increasing tax compliance is one of the board's goals for 2021.

Jaresko said that established best practices call for audited financial statements to be published no later than about six months after the end of the fiscal year. Puerto Rico’s fiscal year ends on June 30.

The audited Comprehensive Annual Financial Report for fiscal year 2017 for the central government was released in August, 38 months after the end of the fiscal year.

Jaresko said the local government has said it would deliver the fiscal year 2018 and 2019 CAFR’s in May 2022. The board has told the government that this timeline is unacceptable, she said.

Jaresko said the board is asking the government to deliver the FY2018 CAFR on April 2021, 29 months after the fiscal year end. FY2019 is to be delivered by May 2022, 18 months after end of fiscal year. All subsequent CAFRS are expected nine months after the end of the fiscal years.

Jaresko also set out 23 structural reforms that the board will try to institute in 2021. These are in the areas of human capital and welfare reform, K-12 education reform, ease of doing business, power sector reform, and infrastructure reform. In the last category the board hopes, among other things, to develop a long-term strategic infrastructure plan.

Jaresko also outlined fiscal measures of agency efficiency reform, state election commissions, Medicaid investments and reform, tax compliance and increases of other taxes and fees, reductions in appropriations to the University of Puerto Rico, municipal services reform, pension reform, and steps to ensure successful implementation and fiscal controls.

Each of these has specific measures. Jaresko highlighted the consolidation of 15 government agencies, procurement efficiencies at the Department of Education, measures to curb the growth of Medicaid costs, and steps to improve tax compliance.

Jaresko said the board is hopeful that disbursement of federal grants to help the island overcome the aftereffects of the September 2017 Hurricane Maria and the late 2019 and early 2020 earthquakes in the southwest part of the island will accelerate from the pace in 2020.

She said that the island had spent 51.4% of its federal Coronavirus Relief Fund money through Dec. 10. This was a greater portion than all but nine of the 50 states had spent.

Jaresko said that the local government had allotted $393 million in the current and next fiscal year for healthcare capital expenditures. Of this $238 million is allocated for the current fiscal year. The government has only spent $3.6 million of this.

She said the island’s healthcare physical apparatus was out of date.

Jaresko said she expected the money to start being spent more rapidly in the coming calendar year.

Board members present at the meeting were long-time members Andrew Biggs and David Skeel and new members Justin Peterson, John Nixon, and Betty Rosa.

President Donald Trump has said he plans to appoint Antonio Medina Comas to the board but he hasn’t yet done so.

Nixon replaced long-time member Ana Matosantos.

Trump is still expected to name a member from a list presented by U.S. House of Representatives Speaker Nancy Pelosi and a list presented by U.S. Senate Majority Leader Mitch McConnell. The second of those selections may either be Skeel or a replacement for him.

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Puerto Rico Commonwealth of Puerto Rico Puerto Rico Public Buildings Authority Puerto Rico Sales Tax Financing Corp (COFINA) Puerto Rico Electric Power Authority University of Puerto Rico PROMESA
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