Puerto Rico gov vows to fight possible furloughs amid crisis

SAN JUAN, Puerto Rico — Puerto Rico's governor made a last-ditch effort Thursday to persuade a federal control board that furloughing tens of thousands of government workers would be an unnecessary blow to the U.S. territory's struggling economy.

Gov. Ricardo Rossello spoke at a news conference looking ahead to a Friday meeting at which the board that oversees the island's finances is scheduled to vote on whether to order furloughs and other measures to rein in spending by the debt-laden government, whose revenues have been strained by a 10-year recession.

Rossello said the Puerto Rico administration has nearly $1.8 billion in cash, which he says is far more than what the board has required to avoid furloughs.

The governor has vowed to go to court to fight any furloughs, which he said Thursday would have a $600 million negative economic impact.

"We will defend the people of Puerto Rico in any forum," he said. "This measure is unnecessary and foolish."

The board has not publicly said whether it will vote in favor of furloughs or take other actions during its meeting Friday. Board members did not immediately reply to a request for comment.

In setting up the board last year, Congress gave the board wide-ranging power to oversee the island government's finances, but Rossello said he is ready to fight it.

"The one who decides public policy here is Puerto Rico's government," he said.

The board earlier this year proposed furloughs of two days a month for teachers and four days a month for other government workers as a way to cut government spending by up to $40 million a month. In addition, all Christmas bonuses could be eliminated by fiscal year 2018.

The board also is expected to talk on Friday about ways to reform the public pension system, which faces nearly $50 billion in liabilities.

More than a dozen municipalities across Puerto Rico already have implemented their own furloughs in recent months as they struggle with shrinking budgets. Some have eliminated up to 20 hours a week, which means a salary cut of up to $500 a month for some workers.

Overall, Puerto Ricans have been hit with new taxes, higher utility rates and other austerity measures as the government seeks to restructure a portion of its more than $70 billion public debt through a lengthy, bankruptcy-like process that recently began in federal court. The U.S. territory has defaulted on millions of dollars' worth of government bonds in recent years, angering creditors seeking to recuperate a portion of their investments via lawsuits.