The $13.1 Billion General Fund Budget Increased 1.5%; More Than 64%, is Dedicated to Education, Public Safety, Healthcare, and Pensions; Developed Jointly with the Administration of Governor González Colón
San Juan, Puerto Rico – May 14, 2025 – The Financial Oversight and Management Board for Puerto Rico has submitted the proposed General Fund budget for the Commonwealth of Puerto Rico’s fiscal year 2026 jointly developed with Governor Jenniffer González Colón to the Legislative Assembly for its consideration.
The Oversight Board approved the proposed General Fund budget as compliant with the Fiscal Plan for Puerto Rico. The $13.1 billion budget increased 1.5% over the fiscal year 2025 certified budget and includes certain reclassifications of general fund revenues as special revenue. It was developed jointly by the Oversight Board and the administration of Governor González Colón with the assistance of the Office of Management and Budget (OMB).
“I am extremely grateful for the close collaboration between my fiscal team and the Financial Oversight Board in being able to work together on this budget, which keeps public spending practically intact while focusing on addressing critical areas in which I uphold my commitment to the people. Among them are doing justice to our retirees, the safety of our residents, and guaranteeing access to healthcare for our people,” said Governor González Colón.
“It is worth noting that the development of this budget was subject to a significant change in methodology by our administration and the OMB, reflecting a firm commitment to this process that represents a positive indication for the budget that this administration will be able to work on from start to finish for fiscal year 2027,” said Governor González Colón. “We will continue working in collaboration with the Oversight Board and the Legislative Assembly to ensure that this budget is successfully implemented and benefits all Puerto Ricans.”
The Oversight Board’s Executive Director Robert F. Mujica, Jr., said, “This budget reflects the knowledge we have today – and Puerto Rico’s fiscal reality today. The budget illustrates that the fiscal responsibility we instilled in previous years puts the Commonwealth in a better position to respond to the changing federal funding landscape.”
“However, the full effect of recent and future changes in federal government policies and funding levels on Puerto Rico’s finances and economy overall is still unclear,” Mujica said. “Like many states, municipalities, and territories across the U.S., we may have to revisit the budget with the Governor and Legislature if federal funding levels change.
More than 64%, $8.6 billion, of the General Fund is dedicated to education, public safety, healthcare, and pension payments, reinforcing the government’s commitment to core services. The increase in spending is primarily allocated to targeted, non-recurring investments to support fiscal responsibility and long-term sustainability, rather than obligations that would create new ongoing government expenses.
Recognizing the evolving risks to Puerto Rico’s fiscal stability, particularly the potential reduction in federal support, the FY2026 budget includes safeguards to protect essential services. These guardrails and levers include budgetary reserves, increased holdbacks, and mechanisms that allow the repurposing of funds to respond to federal government policy changes.
To ensure continuity of essential services, the release of certain funds tied to service expansions will be delayed until there is greater clarity on the extent of federal funding reductions. In the event federal funds are reduced and cannot be offset, the funds originally allocated for expansion may be redirected to cover essential services that were previously supported by federal funding.
The General Fund budget does not include special revenue funds, which are comprised of revenue the government generates from fees and services dedicated to particular uses, or federal funds. Including special revenue and federal funds, the consolidated Commonwealth budget for fiscal year 2026 totals $32.6 billion.
In response to the Governor González Colón’s request, the Oversight Board agreed to reallocate the collected excise tax on rum producers (rum cover over) from the General Fund to the special revenue fund, reducing the General Fund budget to $13.1 billion from the initial $13.3 billion proposed in February, and an increase in the special revenue fund budget by the same amount.
The Oversight and Governor González Colón Board will be working with the Legislature between now and June 3, 2025, when the Legislature submits its proposed budget to the Oversight Board for consideration. The members of the Oversight Board will certify the completed FY2026 budget by June 30, 2025. The new fiscal year starts on July 1, 2025.