Puerto Rico will have significantly less money available for debt service because of the government’s failure to enact labor reform, the federally appointed financial oversight board charged with overseeing the island’s finances said on Friday, Reuters reported. The Financial Oversight and Management Board for Puerto Rico certified a new version of the island’s fiscal plan that includes the elimination of Christmas bonuses to public employees, as well as budgetary cuts to public agencies, the Legislature and the Judiciary, among other measures. “The Legislature failed to pass the most important component of the Labor Reform Package — the repeal of Law 80 and turning Puerto Rico into an at-will employment jurisdiction — as required by the New Fiscal Plan,” the board said in a letter to Governor Ricardo Rosselló. Natalie Jaresko, the board’s executive director, highlighted during a press conference in San Juan that the certified plan leaves out public sector layoffs or a furlough program. Under the new plan, money that is available to the government over the next 30 years, including for debt service, is cut to roughly $14 billion from almost $40 billion under the previous version of the fiscal plan. That is a direct result, Jaresko said, of the failure to enact labor reforms.
