End Near To Puerto Rico Gov't Shutdown

Puerto Rico's Senate on Saturday approved a key piece of legislation aimed at resolving a partial government shutdown that has closed the island's public schools and kept more than 100,000 government employees out of work since May 1.

The Senate unanimously authorized a $740 million loan to fund the government's operations and payroll until the end of the fiscal year on June 30.

The bill, which must be signed by the governor before it takes effect, paves the way for a half-million students to return to class on Monday and for furloughed public workers to head back to their jobs.

"My pen is ready," Gov. Anibal Acevedo Vila said minutes before the Senate announced it had passed the measure.

In a session that stretched well past midnight, the opposition-dominated House unanimously approved the bailout early Saturday, hours after Acevedo warned that the deal to end the crisis could unravel if lawmakers didn't act this weekend.

The Senate also approved a fund to help pay down the island's debt, using 1 percent of an as-yet undetermined new sales tax that was part of the agreement between the lawmakers and Acevedo to end the shutdown.

The Senate on Tuesday was to discuss a third fiscal reform measure, proposed by the House, intended to save some $300 million a year by eliminating and consolidating government agencies.

Lawmakers said the budget reform would eliminate only contract employees from the public payroll, not civil servants.

But union leaders and Acevedo said the proposal — which would cut roughly 3.5 percent of the government's budget — was faulty.

Puerto Rico's political leaders first announced they had reached a deal to end the budget crisis late Wednesday after a special commission called for the emergency loan, the sales tax and other measures to resolve the shutdown, which crippled government services and hurt businesses in this U.S. Caribbean territory.

Hotels, shops and restaurants reported a drop in business as thousands of government workers tried to get by on unemployment benefits of up to $133 per week.

The shutdown also led New York-based Moody's Investors Service to cut the rating of the territory's general obligation bonds to one notch above junk status — affecting about $25 billion of government debt.

Several Puerto Rican economists said the shutdown has not produced savings for the treasury since the government will have to pay overtime to police officers that worked security details during daily protests, among other reasons.

Officials have said furloughed workers would be paid for workdays they missed during the shutdown.
RAMARIS ALBERT