Puerto Rico’s financial oversight board told the bankrupt island’s governor on Monday to revise his proposed fiscal turnaround plan to add more detail on labor and other reforms, and to create room in the budget for a $1.3 billion emergency fund, Reuters reported. In a letter to Governor Ricardo Rosselló, the federally appointed, seven-member panel set a Feb. 12 deadline for the new draft, which will chart Puerto Rico’s plan to regain economic stability. Rosselló’s draft turnaround plan, submitted on Jan. 24, projected a $3.4 billion budget gap that would bar the island from repaying a penny of its debt until 2022. While the plan included subsidy cuts to cities and towns and the streamlining of public agencies, the board, which must approve the plan, demanded more details in yesterday’s eight-page letter. The board wants an emergency reserve of $650 million in the next five years and $1.3 billion within 10 years, “based on best practices for states and territories regularly impacted by storms,” it said. Read more.
In related news, Puerto Rico’s governor said that his administration will unveil a broad education reform bill on Tuesday aimed at incorporating school vouchers and charter schools into the bankrupt U.S. territory’s education system, Reuters reported. Speaking in a televised address on Monday, Governor Ricardo Rosselló also said that every public school teacher in Puerto Rico would receive a $1,500 annual salary increase beginning next school year. It was unclear whether the pay bump would require legislation. The governor’s remarks came 10 days after the island’s education secretary, Julia Keleher, said she planned to decentralize Puerto Rico’s education department and introduce “autonomous schools.” Public school reform is a touchy issue in the U.S. territory, where teachers make an average of about $27,000 a year. Its public school system, organized as a single, island-wide district, is among the weakest in the United States and long plagued by bloated administrative spending. In some age groups, less than 10 percent of students meet federal testing standards. Read more.
