Governor signs the Fiscal Sustainability Law (Act 66)

On June 18, 2014, Governor Alejandro García Padilla signed House Bill 1922 into the Fiscal and Operational Sustainability Law of the Commonwealth (Act 66), Primera Hora reported. The House had concurred that night with Senate amendments: 26 in favor, 20 against and two abstentions.

García Padilla said the measure “sets the legal framework that will let us guarantee continuity of public management” in health, security, education, social work and development, “without laying off employees or cutting the workweek,” and that it manages the consequences of the credit downgrade. He thanked Jaime Perelló, Eduardo Bhatia and union leaders who, “putting the country over particular interests,” helped pass it. The law declares a new state of fiscal emergency.

Key House changes: remove the governor’s power to extend cuts beyond three years; a 10% cut in professional and services contracts; up to 60 days for unions to negotiate agreement adjustments. The Senate added safeguards for federal funds and, after the first year, possible restoration of frozen benefits if the corporation is stable, without deficit and without depending on the General Fund. Stated goal: save and cut spending by more than $1,350 million for the fiscal year starting July 1. An austerity signature ≠ federal disbursement or criminal judgment.

Source: Primera Hora. https://www.primerahora.com/noticias/gobierno-politica/notas/gobernador-firma-polemico-proyecto-que-crea-ley-de-sostenibilidad/