Puerto Rico Governor Pedro Pierluisi called for a 20% increase in payroll spending in his annual state of the territory address to the local legislature on Tuesday.
Pierluisi also said his proposed budget would cut spending on outside professional services by 13%.
The Governor is proposing a general fund budget of $12.573 billion for fiscal year 2023, which would represent a 1.6% increase over the amended general fund budget for fiscal year 2022 that the Oversight Board approved in February.
“Last year, we focused on the crises we had to face: the COVID pandemic, government bankruptcy, budget cuts, fair demands from civil servants and ongoing reconstruction,” Pierluisi said. “This year, although we still have many challenges ahead, we can talk about the future, better control of the pandemic, an end to bankruptcy, investments in our people, a government more efficient infrastructure projects throughout the island and the promotion of our economic development.
Pierluisi said: “The confirmation of the public debt adjustment plan is the most transcendent step we have taken towards the economic recovery of our island…
“It dramatically reduces our government’s debt from $33 billion to $7.5 billion, a reduction of almost 80%; and to have to pay 25 cents of every dollar the government has contributed, to not spend only 7 cents of every dollar on debt.”
The governor spent part of his speech emphasizing how federal spending was helping the island and would continue to do so.
He said that as part of the US bailout, the federal government had agreed to pay three-quarters of the cost of an earned income credit for workers. President Joe Biden also extended the Minor Dependent Credit to low- and middle-income families on the island.
The Federal Emergency Management Agency had 510 projects underway at the start of Pierluisi’s tenure in January 2021, but that figure rose to 3,177 projects by December, the governor noted.
Puerto Rico will receive an additional $177 million from the Federal Highway Administration this year to cover road infrastructure improvements, he said.
The governor thanked Biden for removing the cap on Medicaid benefits residents receive.
As of Tuesday, the island had 18 fewer murders than in 2021 and 11 fewer than in 2020, the governor said. It also had 1,158 fewer Part I serious crimes than in 2020. Part I offenses include murder, rape, aggravated assault, robbery, burglary, robbery, theft of motor vehicles, arson and human trafficking.
The Supervisory Board and Tax Agency and the Local Government Financial Advisory Authority hope to negotiate a new debt agreement for the Puerto Rico Electricity Power Authority in the coming weeks.
“At the Electric Power Authority, after a necessary change of command, the power generation system has been stabilized and a coordinated maintenance plan has been established to ensure sufficient generation and avoid power outages,” said the governor.
“With the LUMA [privatization of transmission and distribution] we have achieved greater stability in electricity distribution. Despite a bumpy start, subscribers without service are already well below past numbers.