Puerto Rico board approves $10B budget as resignations loom

SAN JUAN, Puerto Rico (AP) — Puerto Rico awoke to a new budget approved early Wednesday that largely suspends austerity measures and government cuts for one year as the U.S. territory struggles to recover from hurricanes, earthquakes and the pandemic.

A federal control board that oversees Puerto Rico’s finances approved the $10 billion budget after rejecting a different one that Gov. Wanda Vázquez recently submitted and contained numerous incentives and spending increases that critics say were unrealistic.

Puerto Rico’s 2021 consolidated fiscal year budget is 10% bigger than last year’s, mainly because it anticipates a 17% increase in federal funds. The majority of spending targets health care, education and government pension payments, while areas including housing and agriculture will see cuts.

The budget also contains $83 million worth of incentives in the general fund, including awards ranging from $5,000 to $100,000 for schools that meet certain requirements including teacher and student attendance.

José Carrión, the board’s chairman, said it’s the fourth consecutive year that Puerto Rico’s government has submitted a budget inconsistent with a fiscal plan that serves as the island’s economic blueprint.

“There can’t be spending we can’t afford,” said Carrión, who announced he is stepping down in early October after serving on a voluntary basis since the board was created four years ago.

Puerto Rico remains mired in a deep economic crisis as it restructures a portion of its more than $70 billion public debt load created by decades of mismanagement, corruption and excessive borrowing to balance budgets. The board has said it expects to complete the bankruptcy-like process this year.

Board members said they largely suspended austerity...