COSSEC Fiscal Plan: A Road Map to Strengthen Financial Cooperatives
Financial cooperatives in Puerto Rico, just like credit unions on the U.S. mainland, provide access to banking and financial services to individuals and businesses. Across Puerto Rico, access to these financial services is essential to economic development, mainly outside San Juan where banks have limited presence. The Public Corporation for the Supervision and Insurance of Cooperatives in Puerto Rico (COSSEC) regulates the cooperatives and insures shares and deposits up to $250,000 per person per institution. Significant work remains for COSSEC to build a resilient cooperative system that is aligned with mainland best practices. The COSSEC Fiscal Plan the members of the Oversight Board certified on May 18, 2023, is a road map to improve the regulatory oversight and stability of the cooperative system in Puerto Rico. COSSEC has made some progress but must continue monitoring the coop’s capitalization requirements and continue working on in other areas that, if not promptly
Hot Jobs in Government
The Government of Puerto Rico’s new modern salary structure, which was developed together with the Financial Oversight and Management Board for Puerto Rico as part of the ongoing Civil Service Reform, has brought competitive, market-based salaries to thousands of central government employees. A select list of jobs received a different compensation treatment. Those “hot jobs” are critical, in-demand service jobs for which hiring and retention is more difficult. Given this special status, the base salaries of “hot jobs” were brought to the midpoint of their respective salary grades rather than the new minimums. The government chose direct service positions in health and social services that are not administrative in generally low salary grades to be considered hot jobs, such as nurses, social workers, emergency medical technicians, and juvenile services officials. These hot jobs provide critical direct services to the people of Puerto Rico. As Civil Service Reform continues, more formal
The CRIM Fiscal Plan: A Road Map to a Fair Property Tax System
A fairer, more efficient property tax system will provide municipalities with stable income. The new Fiscal Plan the members of the Oversight Board certified on May 18 outlines a path for Puerto Rico’s Municipal Revenue Collection Center (CRIM) to collect tax revenue from properties that were previously untaxed, updating appraisals to reflect improvements to properties, and making it easier for property owners to pay taxes – all without increasing tax rates. Once fully implemented, these and other initiatives and measures should provide approximately $291 million in revenue each year and provide a stable outlook for CRIM and the municipalities through fiscal year 2028. Real and personal property taxes are expected to remain relatively flat over the projection period, and baseline CRIM revenues are projected to decline if the measures in the Fiscal Plan are not implemented. However, the net effect of economic growth, tapering of Commonwealth support, and implementation of
Civil Service Reform in Education
By Soniemi Rodríguez The Financial Oversight and Management Board and the Puerto Rico Government have started to expand the successful Civil Service Reform from the Treasury Department and the Office of Management and Budget pilot to the administrative and fiscal functions of the Puerto Rico Department of Education (PRDE). The Oversight Board and PRDE has held seven Town Hall meetings to give PRDE employees an overview of Civil Service Reform and discuss the next step: the self-evaluation questionnaires about their workplace experiences, skill sets acquired, challenges faced, and professional development. In the questionnaires, employees are asked about their specific duties, how long it takes them to carry out different tasks and self-assess their skills and proficiency in various areas. The results of the questionnaires and other information will inform the recommendations to help improve PRDE’s organization structure, potential reclassification of positions, recruiting, and enhancing training to strengthen knowledge and skills.
PREPA Employees Have Substantial Incentives to Join Genera
Puerto Rico’s energy sector transformation rests partly on transitioning the management of PREPA’s existing power plants to a private operator, which will also assume responsibility for environmental compliance, safety, and decommissioning old plants. The agreement with Genera PR LLC to operate and maintain legacy power plants is a key element of Puerto Rico’s energy transformation, ensuring reliable and cleaner sources of power while Puerto Rico moves towards the renewable energy goals defined by Act 17-2019. Genera must recruit essential PREPA employees with the required technical expertise and knowledge to continue carrying out the operation and maintenance of the legacy generation units, particularly given the age of these assets. PREPA’s Employee Retirement System, meanwhile, had been underfunded long before the debt restructuring process under Title III of PROMESA even began. As of May 2017, PREPA’s pension liability exceeded $4.3B, only about $700 million was funded. In other words, for every $1
Civil Service Reform: What’s Next?
The Government of Puerto Rico has for the first time in over 30 years one uniform system for assigning jobs and pay in the central government. As part of Civil Service Reform, the government, working with the Financial Oversight and Management Board, didn’t just consolidate job classes and pay systems. A new modern vision for compensating employees was developed, while ensuring fiscal responsibility and using a data-driven market-based methodology, to foster professional growth. With the aim of informing the public and providing transparency on this important initiative, the Oversight Board’s Policy & Research team has published an essay explaining the new salary structure, and outlining the compensation philosophy and leading practice methodology used to develop said salary structure. Despite the progress that has been achieved thus far in implementing the CSR, much work remains to be done to complete the government’s compensation system and ensure the expansion and sustainability of