Where are the budget cuts? PR budget 2012 = $9.1 billion, increased to $9.8 billion = 2013, now = $9.64 billion. No reduction! @cate_long
— Tere Nolla (@teresitanolla) April 30, 2014
Things are buzzing in Puerto Rico after Governor Alejandro Garcia Padilla gave his annual fiscal address in which he proposed his budget for fiscal year 2015. The government also held a conference last week to attract new investors.
Puerto Rico also filed notice with the MSRB that it is unable to complete its 2013 fiscal year financials on time. They will be published sometime later this quarter. Bond issuers are responsible to file their audited financials within 305 days after the close of the fiscal year. It is unusual for a state-level issuer to miss the reporting deadline. Bond investors don’t seem concerned, however, as they traded the new $3.5 billion general obligation bonds due 2035 near the original offering price of 93.
Legislation was also filed right after the budget was proposed to declare a three year state of fiscal emergency for the Commonwealth. Noticel reports:
The executive filed a law on Wednesday to declare a state of fiscal emergency to extend spending cuts to public corporations and autonomous bodies and force unions to renegotiate collective agreements. The budget contains a total of $ 1.357 million in savings, of which 27 percent came from a freeze on increases.