An increased budget was approved for the fiscal year 2023 to help lower Puerto Rico’s debt by the territory’s Legislative Assembly on June 29, 2023. The final budget was approved by the House of Representatives; 44 votes in favor and three against, with the Senate having 19 votes in favor with seven against. President of the Senate, José Luis Dalmau (PDP, D), boosted on the matter, stating that “Today [June 29, 2023], 19 votes were obtained to approve a budget that contains more than $100 million in increases for the University of Puerto Rico and more than $90 million for the municipalities, in addition to other items in the areas of economic development, education, and health.”
The new budget, which was increased by 12%, increases funds for the education system and seeks to end power outrages; it also lowers the islands’ chances of filing for bankruptcy. Countless issues add to the declining economy, such as inflation, a decrease in working people, and the lack of an increase in the minimum wage. While primarily the budget will help restore Puerto Rico’s power grid, the budget will also allow an estimate of $650 million to the islands’ emergency funds and another million to cover Medicaid. Specific uses for the budget include general funding for day-to-day expenses, including public health, education, and environmental issues. It also allows funding for pension payments and retirement funds, providing safety nets for the families of Puerto Rico.
Since the islands’ government filed for bankruptcy in 2017, the islands are recovering from the biggest bankruptcy in US history, stating in 2015 that it could not pay more than $70 million. Through decades of corruption, mismanagement of the islands’ budget, and constant borrowing, the debt only increased. Puerto Rico filed for bankruptcy two years after the creation of the Financial Oversight and Management Board for the islands. With the increase in the budget, Puerto Rico has more of a fighting chance to pull back from bankruptcy and to help restore the economic status of the islands, with a part of the funding being used to “protect future government pensions from economic uncertainty.”