Puerto Rico has come a long way from the fiscal crisis that led to the enactment of PROMESA. Since the Financial Oversight and Management Board for Puerto Rico (Oversight Board) began its work, government budget stabilized, the deficit disappeared, and fiscal plans helped improve fiscal planning. So, what is next? During A Better Plan: Symposium on Puerto Rico’s Fiscal Future – State Budget Tools, Principles and Practices, budget directors from five U.S. states shared their experiences with the building blocks of successful fiscal planning and budgeting that support long‑term recovery and Puerto Rico’s ongoing fiscal transformation.
The Symposium, sponsored by the National Association of State Budget Officers (NASBO), brought together budget experts from Illinois, Ohio, North Dakota, New Mexico, and Utah who have done it all. Some just completed the process of formulating their own state’s next budget. They focus every day on the fundamentals: how to forecast government revenue, how to build reserves against uncertainty, how to plan capital investments strategically and how to make reforms stick across administrations — all while maintaining focus on these same priorities, and something even more basic: establishing a statutory budget framework that most governments take for granted.
The discussion made clear that meaningful reform depends on strong institutions, reliable data, and sustained collaboration—not just in Puerto Rico, but everywhere—in every state, territory, municipality, or government agency. Many states have faced, and overcame, fiscal challenges. The panels discussed how. For Puerto Rico, following these practices and examples will help ensure that, once the Oversight Board is gone, the Government can sustain strategic, future‑focused fiscal planning and stability.
Establishing the Foundation for how Puerto Rico Plans, Allocates, and Executes the Use of Public Funds
Panels and talks addressed questions about capital budgets, financial plans, economic and revenue forecasting, best practices, and fiscal risk management. The conversations also allowed budget experts to share insights gained from years of managing U.S. state finances.
The panelists were:
- Sophia DiCaro – Executive Director, Office of Planning and Budget (Utah)
- Christina Frass – Assistant Director, Office of Budget and Management (Ohio)
- Doctor Andrew Miner – Director, Department of Finance and Administration (New Mexico)
- Joe Morisette – Director, Office of Management and Budget (North Dakota)
- Alexis Sturm – Director, Office of Management and Budget (Illinois)
Puerto Rico Governor Jenniffer González Colón, Puerto Rico Treasury Secretary Ángel Pantoja Rodríguez, and the Director of the Puerto Rico Office of Management and Budget (OMB) Orlando Rivera Berríos emphasized their shared commitment to advancing long-term, sustainable budget reforms to ensure consistent and reliable funding of public services, therefore improving quality of life for the people of Puerto Rico.
Laying Out the Pillars for Strong Budget Reform
The expert panelists shared their real-world experience and emphasized that the fiscal challenges Puerto Rico has faced and the reforms it must make to avoid falling back into financial distress are not unique to the Island. They are the same difficulties from which several other states and the District of Columbia endured and emerged stronger, after reforming how Government finances were managed. The reforms Puerto Rico must undertake align with the standard practices followed by jurisdictions across the nation. These expectations are consistent with what markets, including rating agencies, regard as standard requirements.
They highlighted that advancing structural budget reforms that promote transparency, accountability, and responsible fiscal management are essential to transforming a financial crisis into long-term fiscal stability.
As they provided insight into the lessons learned while working in state government, they discussed how to effectively manage fiscal risks, improve coordination across government agencies, and ensure that reforms are sustained over time across party lines and government transitions.
All five budget directors agreed that:
- Lasting reforms must be written into law and include statutory frameworks and commitment from the Executive. Doctor Miner framed this best practice in the context of New Mexico, where both the legislature and the Governor’s Office actively monitor the performance of reforms and pursue new legislation when necessary. Similarly, Frass described how, in Ohio, the collaboration between the Office of Budget and Management and the legislature allows all statutory frameworks to be analyzed efficiently and transparently, and once implemented, they are sustainable.
- Establishing reserves with clear deposit rules and withdrawal criteria can protect governments during economic downturns, both expected and unexpected. Frass noted in Ohio, there are guardrails for the state’s Rainy-Day Fund, as well as for other reserves, such as the Medicaid set-aside. Sturm highlighted, in the case of Illinois, building reserves has become a crucial practice to improve the state’s credit rating.
- Multi-year financial plans should be required by law so that governments can build long-term credibility with capital markets. Morrisette of North Dakota and Frass of Ohio emphasized that multi-year plans are also important to maintain healthy budgets in the long term and to ensure any unexpected surpluses are properly allocated, whether they are saved or spent.
- Strong guardrails (clear, enforceable rules) play a critical role in preventing governments from overspending when political pressures or economic volatility would otherwise push budgets off course. Morrissette’s experience in North Dakota stood out: long before facing major revenue swings from oil prices, voters approved constitutional limits that restrict borrowing and require saving a share of volatile revenues. These rules cannot be easily undone, and because of that, discipline persists even when budgets are in surplus. Sturm of Illinois and Frass of Ohio emphasized the same principle through different tools: statutory caps on debt service, required reserves, transparent reporting, and active use of the governor’s veto authority to keep budgets in balance. All three agreed that guardrails work only when they are widely understood, consistently applied, and built to outlast any single administration.
- Multi-year forecasting paired with automatic corrections—like spending reductions or updated revenue baselines—is essential for states to remain in balance. The states that struggled the most were often those that delayed tough decisions or relied on temporary windfalls as if they were permanent. Sturm described how years of imbalances and credit downgrades in Illinois forced the Government to rebuild trust through multi-year planning, strict affordability tests, and a commitment to use one‑time surpluses for paying down debt and replenishing reserves—not new ongoing expenses. Morrissette described a different type of challenge in North Dakota: when revenues surged unexpectedly, spending grew too quickly, creating a painful “reset” when revenues fell.
Across states, the message was consistent: with solid guardrails, transparency, and discipline, a resilient and sustainable fiscal system is absolutely within reach.
