The tumult that's shaken the University of Puerto Rico may soon spread to other sectors of the island's population.
Puerto Rico Gov. Ricardo Rosselló is expected to release his proposed budget with deep cuts to programs Wednesday. Rosselló’s budget is a reaction to the demands of the Oversight Board for a structurally balanced budget. On Friday two UPR professors predicted the budget will lead to widespread militant actions.
Proposed cuts in government spending on the university have spurred students to go on strike and several of the university’s campuses have been closed since around late March. While there have been discussions between the university leadership and the students, the two sides haven’t been able to reach an agreement yet.
Rosselló’s budget will lead more sectors of Puerto Rico to join the struggle against austerity, “especially if there are cuts in pensions and health,” said UPR sociology professor Emilio Pantojas García.
The oversight board has called for spending cuts and revenue increases in the coming fiscal year equal to 10.7% of what revenues had been projected without the measures for all central government activities. This proportion is projected to increase to 28.8% in fiscal year 2022 and even higher in later years. Since most of the revenue increases and expenditure cuts will affect the General Fund, the impact there will be much greater.
“People are increasingly anxious and angry,” Pantojas García said. “French sociologist Henri Lefebvre said revolutions occur when everyday life becomes unbearable. We are reaching that point. This is not the age of revolutions, so I only expect riots and mass migration.”
UPR political science professor José Garriga Pico saw things similarly: “In some, the opposition to the austerity measures will lead them to frustration and fear, as well as real suffering, and an intensification of the militancy against the Financial Oversight Board, its policies, Gov. Rosselló and his budget proposal. These could engage in protest that may turn confrontational and violent.
“Others will opt for the $200 Jet Blue solution.”
Garriga Pico also said the new U.S. president's priorities would have an impact. “The very poor receive mostly federal help; thus, their situation will probably feel a larger impact from any Trump cut in the budget than from the Puerto Rico Oversight, Management, and Economic Stability Act and the Oversight Board.
“Still others will swallow hard and deal with the austerity and make the best out of it. Some may even better their lot in the process. Social change processes are always complex and this one is very unique, intense and unpredictable. … I must confess that I do not know what will happen.”
Protests in Puerto Rico have focused on the government's handling of the debt crisis. In April protesters gathered at the legislature in San Juan as lawmakers were voting to end a debt audit commission.
In the face of the board’s demands for cuts to UPR, developments at the university have already taken some strange twists. When Rosselló asked in February the university to absorb a $300 million annual cut in government funding, the university’s president and 10 of its 11 rectors resigned in protest.
The board has since said the annual cut will have to be $411 million in the coming fiscal year, which starts July 1. This value would be 44% of what the government appropriated to the school in fiscal year 2015. The board has indicated that the cuts would have to go further in later years.
This spring a judge ordered then interim president Nivia Fernández to submit a plan to reopen the main Rio Piedras campus. Fernández asked Puerto Rico’s police department to open the main gates to the campus. The chief of police said it wouldn’t do this because the department traditionally respected the “autonomy” of the university. Fernández then sued the police department.
The judge said she would imprison Fernández for six months if she didn’t submit a plan for opening the university. Hours before the deadline on May 23, Fernández and several members of the university board resigned. The judge then excused Fernández from prison but continued a $1,000 per day fine on the university until it opened operations.
On May 18 the Middle States Commission on Higher Education put the accreditation of eight University of Puerto Rico schools, including the one in Rio Piedras, on probation. If the schools ultimately were to lose their accreditation students would lose federal financial aid like Pell Grants, federal student loans and the work study program. In putting the schools on probation, the commission cited concerns about whether the institutions were operating and whether they had adequate financial resources.
As of February, the university had $496 million in debt outstanding, according to the board certified fiscal plan. On March 20 Moody’s Investors Service senior credit officer Diane Viacava said the government planned cuts for Puerto Rico were a “credit negative because they will be difficult for the university to absorb.”
Viacava said she believed that debt service reserves would cover June 1 and July 1 debt service payments. She said she expected that the university was likely to default on subsequent payments “absent a resumption of fund transfers to the trustees.”
The university is rated Ca by Moody’s and CC by S&P Global Ratings.