Governor Ricardo Rosselló and the Financial Oversight and Management Board (FOMB) have announced an agreement on a budget for FY 2018/2019. This agreement is crucial to ensuring compliance with the FOMB’s Fiscal Plan, which in turn helps determine how much debt service Puerto Rico can afford – it’s repayment capacity.
Accurately assessing Puerto Rico’s repayment capacity is problematic, however, due to many unique problems. Paramount among these, Puerto Rico’s leadership is asserting that the devastation and economic costs wrought by Hurricane Maria have lowered the Commonwealth’s fiscal repayment capacity. The data do not support these assertions.