OVERSIGHT BOARD CERTIFIES FISCAL YEAR 2026 COMMONWEALTH BUDGET
Jointly Developed with the Government of Puerto Rico; 62% of Funding Allocated to Health, Education,
Public Safety, Housing, and Retirees; Reflects Uncertainties Around Federal Funding and Includes Reserves and Contingencies to Offset Potential Cuts; Investments in Social Services
San Juan, PR – June 27, 2025 – The Financial Oversight and Management Board for Puerto Rico certified the $32.7 billion fiscal year 2026 consolidated budget for the Commonwealth of Puerto Rico consisting of the $13.1 billion general fund budget, the $5.4 billion special revenue fund budget, and the $14.2 billion federal fund budget. It was developed jointly by the Oversight Board, the administration of Governor Jenniffer González Colón, and the Legislative Assembly.
“Together, we developed a responsible budget that reflects the unprecedented uncertainty around federal funding, economic growth, and Medicaid costs in the coming fiscal year,” said the Oversight Board’s Executive Director Robert F. Mujica, Jr. “The Governor and the legislative leadership worked with the Oversight Board to protect essential government services and shield government priorities from the uncertainty that we face right now.”
More than 60% of total government funding is allocated to health, education, public safety, housing, and retirees. The fiscal year 2026 general fund budget increases total spending by 1.5% from the previous fiscal year, excluding certain reclassifications of general fund revenues as special revenue. Additional funding includes support the Department of Education’s special education program, and to fund the share of the salaries of fire fighters, emergency medical professionals, and correctional officers that were previously paid by expiring COVID-19 related stimulus funds by the U.S. Government.
Funding from the U.S. Government declined about $1.2 billion, in part because of a drop in federal funding for education.
The consolidated budget prepares the Government for potential further declines in federal funding over the fiscal year that begins on July 1, 2025. The budget holds back 5% of most agency spending for eight months to prevent deficits should General Fund revenue decline, federal funding decreases or Medicaid costs increase. Certain expenses are exempt from the hold back, including pensions, public safety, certain transportation costs, and sales tax distributions to municipalities.
The budget further includes a reserve to cover the rising healthcare cost related to the Puerto Rico Government’s share of Medicaid coverage that the Government currently negotiates with healthcare providers. And the budget identifies expenditures that could be reallocated to cover potential federal funding reductions or additional increases in Medicaid costs.
The budget also includes significant funding to support investments in healthcare, education, public safety, social programs, and government transformation. The healthcare investments include $95 million to increase subsidies for medical residents and pay raises for nurses, new ambulances, and other investments. Social programs receive $65 million of investments to increase care for older residents and adults with disabilities, childcare vouchers, and services for victims of sexual abuse.
The Oversight Board also certified the fiscal year 2026 budgets for:
- University of Puerto Rico (UPR)
- Puerto Rico Sales Tax Financing Corporation (COFINA)
- Municipal Revenues Collection Center (CRIM)
- Puerto Rico Aqueduct and Sewer Authority (PRASA)
- Puerto Rico Highways and Transportation Authority (HTA)
The Oversight Board already certified the fiscal year 2026 budgets for the Public Corporation for Supervision and Insurance of Cooperatives (COSSEC) and Puerto Rico Industrial Development Company (PRIDCO).
All budgets are available on the Oversight Board’s website at https://oversightboard.pr.gov/budgets-2/