July 30, 2021

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Governor knew that JCF would request dismissal of public employees

The Fiscal Control Board informed the Government of Puerto Rico that significant reductions in public employees would be required

Photo: Visualhunt

Strength – Governor Wanda Vázquez Garced, although she was against the position of the Fiscal Control Board (JCF) for the dismissal of public employees to give way to laws 80, 81 and 82, said on Tuesday that she had previously known about the intention of the federal entity.

“Last week we had a virtual meeting precisely with the president of the Fiscal Control Board (David Skeel) where the executive director (Natalie Jaresko) was also present. Before that, we had a meeting with her where she had told us that this was a possibility, ”Vázquez Garced said to questions from the press.

“I clearly and emphatically make it clear that here we are not going to accept any suspension of public employees,” he added.

He mentioned that “we submitted and signed Law 80, 81 and 82 because we understood and there is documentation that there were savings. In addition, beyond the social justice that is done for all retirees who more than deserve it. So in these conversations we have continued looking for alternatives so that the resources are obtained and a dignified retirement can be given for these people without the dismissal of public employees ”.

“That is not, nor will it be an option,” stressed the president who assured the federal entity that she will not accept layoffs.

He also insisted that he will continue with the implementation of the three laws that he approved and mentioned that the circular letters have already been submitted to establish the requirements and people who qualify.

“Anyone who wants to retire and who qualifies, because we have to give them the opportunity to follow the process. The process has continued. And especially the conversations with the Board to look for those alternatives so that Law 80, 81 and 82 is passed and in addition to that, that there is no suspension of public employees, “said the governor.

The Fiscal Control Board informed the Government of Puerto Rico that significant reductions in public employees would be required -beyond the provisions of the Certified Fiscal Plan- in order to mitigate the cost of higher retirement benefits defined in Laws 80, 81 and 82.

“If the government remains committed to implementing these additional retirement benefits for government employees, it has a very difficult decision to make,” Board Executive Director Natalie Jaresko said in written statements.

“The government will have to cut spending, including cuts to police, firefighters and other government employees to pay for these laws,” he added.

He mentioned that given the significant inconsistency with the Certified Fiscal Plans, the Board also informed the government that these laws should not be implemented until it is shown that the necessary reductions in personnel and salaries can and will be achieved without affecting essential services.

The governor enacted all three laws in August without sufficient analysis of how much the laws would cost and where the savings would come from to cover those incremental costs. Even after repeated exchanges with the Board, the government’s analysis remains incomplete. The Board’s analysis of the impact of the three laws found that, combined, they could increase government spending by up to $ 8.3 billion over the next 30 years.

He noted that to offset these additional expenses, the government will have to impose substantial spending cuts, which will result in significant reductions in the government’s workforce to ensure consistency with the Certified Fiscal Plan and balance the budget, as required by PROMESA. . The government must provide a realistic plan to offset the substantial costs of each of the three laws without harming essential services. Unless and until the government provides a plan to offset incremental costs and the Board accepts that plan, the laws are significantly inconsistent with the Certified Fiscal Plan and should not be implemented.

The executive director added that “the Certified Fiscal Plan defines a careful balance between fiscal responsibility and government efficiency. The budget cuts needed to offset the incremental cost of benefits provided by the three laws could harm essential government services, increase long-term costs and jeopardize the ability to implement the critical reforms mandated in the fiscal plans. “

“The implementation of these laws is not compatible with the best interest of the people of Puerto Rico,” said Jaresko.

The Board asked the government to provide a plan on how the additional costs will be financed by October 28 and to stop implementing the laws until the Oversight Board provides its consent to the plan proposed by the Government to mitigate the costs of these laws. .

Likewise, Jaresko urged public employees “to be aware that they should not depend on the additional benefits provided by these laws unless and until the fiscal problems have been resolved.”

He explained that if the government continues to implement measures under these laws inconsistent with the Certified Fiscal Plan and PROMESA, the Board could take actions that it deems necessary, in accordance with its powers under PROMESA, to prevent further damage to the financial future of Puerto Rich.

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