San Juan, PR – March 3, 2023 – The Financial Oversight and Management Board for Puerto Rico today issued the following statement:
The Oversight Board welcomes the decision by Judge Laura Taylor Swain of the U.S. District Court for the District of Puerto Rico declaring that Act 41-2022 is null and void ab initio, and enjoining the Government of Puerto Rico from implementing or enforcing Act 41-2022.
The Court noted in its ruling today that it previously explained that a formal estimate under Section 204(a) of PROMESA “means a complete and accurate estimate ‘covering revenue and expenditure effects of new legislation’ over the entire period of the fiscal plan.”
In the case of Act 41, the Court said, “the Governor has failed to show that the “formal” estimate requirement of section 204(a)(2)(A) has been satisfied.”
An economic analysis by the Oversight Board concluded that Act 41 will have a negative effect on Puerto Rico’s labor market and its economy overall, leading to fewer jobs, higher outmigration, declining economic growth, and lower Commonwealth tax revenues.
The practice of enacting laws without regard to, or an understanding of, the economic consequences is at the root of Puerto Rico’s fiscal crisis and eventual bankruptcy.
The Oversight Board and the Government have achieved a lot working together to implement real change, to improve the business climate and the life of every resident of Puerto Rico. Puerto Rico needs to move forward and enhance fiscal responsibility to cement the progress Puerto Rico has made over the last six years.
To achieve real, sustainable, and long-term growth and a future of opportunity we must continue to work together to not implement laws that threaten to set back the milestones achieved.