OVERSIGHT BOARD CERTIFIES AMENDED FISCAL YEAR 2023 BUDGET
Provides Funding for Emergency Reserve, Energy Transformation, and Health
San Juan, PR – May 12, 2023 – The Financial Oversight and Management Board for Puerto Rico announced that its members today certified an amended general fund budget for the Commonwealth of Puerto Rico for the current fiscal year 2023.
The Oversight Board certified a $13.9 billion general fund budget that reflects updated revenue and expense projections. The amended budget includes $650 million previously authorized for the government’s Emergency Reserve and $545 million for a loan to the Puerto Rico Electric Power Authority (PREPA) to ensure sufficient working capital. The certified amended budget also provides an additional $100 million requested by the Puerto Rico Health Insurance Administration (ASES) to fund a potential Medicaid funding shortfall.
The revised Fiscal Plan for Puerto Rico prioritizes the allocation of updated revenue estimates to pre-existing unfunded obligations and commitments. Those investments and expenditures are incorporated in the certified amended budget. Governor Pedro R. Pierluisi had submitted a compliant amended budget to the Oversight Board in accordance with the Fiscal Plan. The Puerto Rico Legislature, however, did not pass an amended budget or submitted an amended budget to the Oversight Board.
“The amended budget for the current fiscal year the Oversight Board certified today reflects spending priorities that are essential for the people of Puerto Rico,” said the Oversight Board’s Executive Director Robert F. Mujica Jr. “The reserve to help the people, the government, and municipalities in case of natural disasters and other emergencies had run too low. The amended budget also reflects the Government’s and the Oversight Board’s shared priority of improving healthcare in Puerto Rico and completing the transformation of Puerto Rico’s energy system to provide the people and businesses with more reliable, more affordable, and cleaner energy.”
“The budget is the prime responsibility of any elected legislature, yet this is the third consecutive time the two chambers of the Puerto Rico Legislature failed to submit a budget for the government,” Mujica said. “PROMESA gave the Oversight Board the authority to certify a compliant budget, but it did not take away the Legislature’s responsibility to approve and submit a budget. The budget is a key element of fiscal responsibility owed to the people of Puerto Rico. The Governor and the Oversight Board are currently working on the fiscal year 2024 budget, and the Oversight Board hopes both branches of the government will approve and submit a compliant budget for the Oversight Board’s review and certification.”
The Emergency Reserve provided direct assistance to people affected by natural disasters, funded the temporary relocation of schools during the pandemic, and provided vital support to municipalities. Fully funding the Emergency Reserve, consistent with the Fiscal Plan, ensures that the Government has sufficient resources to help the people of Puerto Rico quickly and efficiently in cases of emergencies.
The loan to PREPA establishes a working capital reserve for Genera PR LLC to ensure investments and upgrades are made and suppliers are paid, and is a requirement under the agreement of the Puerto Rico Public Private Partnerships Authority (P3A) and PREPA with Genera. The working capital is not a payment to Genera for operating power plants but instead provides critical operational liquidity. PREPA’s failure to maintain adequate cash reserves in the past left the system vulnerable to natural disasters and impeded PREPA’s ability to respond quickly to crises.