WASHINGTON--(BUSINESS WIRE)--Today the Ad Hoc Group of Puerto Rico General Obligation Bondholders and its advisor, former Governor of New York, George Pataki, released a Memorandum for Policymakers on Puerto Rico. The memorandum, along with a presentation which can be found at www.FactCheckPuertoRico.org, includes analysis of financial material that was recently made public by the Center for Investigative Journalism.
Key excerpts from the memo:
- The (Commonwealth’s FY 2018) budget includes year over year public expenditure increases of $575 million; a fact which the Commonwealth attempts to obscure by reclassifying certain expenses as “below the line,” including two large slush funds (the $545 million “reconciliation adjustment,” and the $305 million “budgetary reserve”).
- The Board insists on projecting a decrease in the Commonwealth’s revenues and a contraction in the island’s GNP, in spite of contradictory information. Puerto Rico’s revenues are up, powered by robust consumer consumption. Both tax collections and nominal GNP are at all-time highs.
- The Oversight Board uses these misleading projections to argue that the island has the capacity for only $400 million in debt service in the coming year. In fact, before pension payments, the Commonwealth is running a primary surplus of $3 billion for FY18. It also has $1 billion less in accounts payable – spread over multiple years – than had previously been forecast by the Fiscal Plan.
The memorandum for policymakers along with a more detailed presentation entitled “Puerto Rico: Separating Fact from Fiction” can both be found online at www.FactCheckPuertoRico.org.
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