Puerto Rico files fiscal plan without layoffs, pension cuts

By DANICA COTOMarketsAssociated Press

Puerto Rico's government submitted a required fiscal plan on Thursday that excludes pension cuts and layoffs sought by a federal oversight board as legislators in the U.S. territory angered by its demands debate a bill that would withhold payments for board member salaries, among other things.

Gov. Ricardo Rossello told reporters that he hopes his administration and the board can reach an agreement on the fiscal plan so they can move toward restructuring a portion of the island's more than $70 billion public debt load amid an 11-year recession. He said that if the board certifies a fiscal plan that contains layoffs and a 10 percent cut to a pension system already facing nearly $50 billion in liabilities, his administration will not implement those measures.

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"We are asking the board to reconsider their position of trying to impose public policy and let the government of Puerto Rico do its job," Rossello said.

The board has not yet commented publicly on the fiscal plan, which Puerto Rico's government revised to meet some of the board's demands.

Rossello did not say whether he supports a bill recently approved by Puerto Rico's Senate that would withhold public funds slated for a board operating with a $60 million budget but seeking an $80 million one for upcoming years. Nearly $2 million worth of public funds are spent on the board's salaries, including $625,000 a year for its executive director.

Rossello said he understands the frustration that is building against the board.

"I will not limit myself to actions I can take in the future," he said regarding the bill that will go to the island's House of Representatives for consideration.

The fiscal plan anticipates a $6.4 billion surplus over five years, but Gerardo Portela, director of Puerto Rico's financial authority, said the island's government would face a nearly $10 billion deficit if it pays its public debt.