Governor seeks fiscal emergency law to allow spending cuts across board

The emergency measure was presented along with the governor’s $9.64 billion spending plan for fiscal 2015 (starts July 1), which calls for more than $1.4 billion in cuts and adjustments by consolidating 25 government agencies and imposing an average 8 percent spending cut for most agencies, among other things. The budget includes $775 million to pay off debt — $525 million more than in last year’s budget. At least 100 underutilized public schools could be closed.

The $9.64 billion budget aims to strengthen and revive the economy as the U.S. territory remains in a recession dating back to 2006 and grappled with $73 billion in public debt. That includes $3.5 billion in junk bonds issued in March for refinancing to provide the cash-strapped government some breathing room to boost revenues and jumpstart the long-lagging economy.

The budget does not call for layoffs of government workers.

The fiscal emergency measure would compel all central government agencies and public corporations to cut back Christmas bonuses to workers to $600, which would match the minimum required under law for private companies to pay their employees.

The fiscal emergency law would also eliminate the liquidation of unused sick days for public workers, except police officers, and suspend incremental benefits for government employees.

Office of Management & Budget Director Carlos Rivas said it is up to each agency chief to seek to renegotiate collective bargaining agreements, If unsuccessful, they have to find the savings somewhere else, he said.

The OMB chief acknowledged that the proposed law impacts acquired rights and contracts and could face legal challenges.

“The government is trying to save money to pay its debts,” Rivas said. “The point is to save jobs.”

Gov. Alejandro García Padilla has filed legislation to declare a fiscal emergency that would allow the administration to impose cost-cutting measures across the central government, public corporations, municipalities and autonomous entities.

Governor seeks fiscal emergency law to allow spending cuts across board