NEW YORK (Reuters) - Puerto Rico increased its projected five-year cash surplus to $7.36 billion in a revised fiscal turnaround plan on Thursday night, but did not include layoffs or pension cuts that have been urged by the insolvent island’s federally-appointed oversight board.
Puerto Rico, which is in bankruptcy with $120 billion in debt while it struggles to recover from September’s devastating Hurricane Maria, is required to submit a turnaround plan as a basis for planned restructuring talks with bondholders.
The board, created by the U.S. Congress to manage the U.S. territory’s finances, can impose its own plan if it rejects the one submitted by Puerto Rico Governor Ricardo Rossello.
The two sides have spent months negotiating a consensual plan, but remain apart on key issues after several drafts. Rossello has vowed to fight the board’s proposed 10 percent pension cuts, as well as some elements of labor reform.
The governor has also insisted he can achieve the board’s requested level of spending cuts without layoffs in the public sector workforce, which the board has been skeptical about.
The board has set an April 20 deadline to approve a turnaround plan for the island.
While it has extended several past deadlines to continue talks with the governor, a source familiar with the board’s thinking told Reuters on Thursday the board would certify a plan one way or the other on April 20, even if it meant altering the plan to include some of the initiatives resisted by Rossello.
Reporting by Nick Brown; Editing by Frances Kerry