Puerto Rico governor defies oversight board on worker furloughs

Puerto Rico governor defies oversight board on worker furloughs
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Puerto Rico Gov. Ricardo Rosselló (D) on Friday said he would not implement a government worker furlough mandated by the federally appointed Fiscal Oversight Board.

The oversight board, established by the Puerto Rico Oversight, Management, and Economic Stability (PROMESA) Act, was given control of Puerto Rico’s finances.

The board announced the plan to furlough government workers for two days each month on Friday. The plan would exclude frontline law enforcement personnel, reported Reuters.

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But on late Friday afternoon, Rosselló said he will not "accept or execute" the furlough. He said his "administration has defined as public policy the protection of the most vulnerable sectors of our society."

"Activating our economy and stimulating the creation of more and better jobs in Puerto Rico must be a common objective, both for the government and for the Financial Oversight and Management Board," added Rosselló.

"The furlough proposed by the Board would provoke the opposite, increasing the crisis and hitting our People unnecessarily, which is why we will not allow it."

The furlough was set to begin Sept. 1 and continue through fiscal 2018.

Natalie Jaresko, the executive director of the oversight board, said at a public meeting of the board that the government's cost savings proposals left a $218 million budget gap.

The board said furloughs could be scaled back or eliminated if the government saved enough money through its proposed cost-cutting measures.

Puerto Rico passed a last-minute board-approved budget in July.

The island is saddled with nearly $72 billion in debt. The government's inability to pay its debt obligations detonated the fiscal crisis that led to the oversight board.

Since the establishment of the board, there had been no major public disagreements with the government. Both the board and the government have been criticized by representatives of Puerto Rico's bondholders, who are upset over bankruptcy-like protections taken by the island in May.

"To the members of the Financial Oversight and Management Board, I encourage you once again to take the path of good judgment and prudence, instead of the path towards an unnecessary confrontation," said Rosselló Friday.

Members of the House Natural Resources Committee --the committee of jurisdiction over PROMESA -- have said they will hold an oversight hearing after the August recess, but it has not yet been scheduled.