Puerto Rico's Senate approved belt-tightening measures for government employees, a prerequisite for the adoption of Gov. Alejandro García Padilla's budget.
The Special Law for Government Fiscal and Operational Stability would institute a number of steps leading to lower spending on government labor and government operations.
The Senate passed the bill with a few minor amendments, Monday. The bill will go back to the House for its vote on the amended bill and then to the governor for his signature.
A source in the governor's office said she believed the House will approve the amended bill on Tuesday and that the governor will sign it.
The legislature is now working to create a budget for fiscal year 2015, which starts on July 1.
The governor and legislators from his party, Popular Democratic Party, are seeking to create a budget that would require no further borrowing for operating deficits. The budget would be balanced, albeit supported by $270 million in capitalized interest from the bond Puerto Rico sold in March.
After Puerto Rico has borrowed for more than 20 years for operating expenses, bond market participants have become increasingly skittish about lending their money to the commonwealth. That has led to higher borrowing costs for Puerto Rico issuers in recent bond sales.
The governor and his party want to reduce the commonwealth's dependence on borrowing and avoid the possibility of default due to lack of access to the market.
