Puerto Rico rejects fed orders

SAN JUAN, Puerto Rico (AP) — Puerto Rico’s new governor on Friday rejected orders from a federal control board in the first clash over how best to tackle the government’s deep financial crisis after a decade-long economic slump in the U.S. territory.

Gov. Ricardo Rossello called the board’s demands unacceptable and said they differ greatly from his vision to promote economic growth.

“Any fiscal plan premised exclusively on a reduction in the health, well-being, and living standards of the people of Puerto Rico through health care delivery cutbacks, current retiree pension reductions … and layoffs is by its nature unacceptable,” he said in a letter to the board, adding that he is willing to work with the board to reach “acceptable balance.”

Rossello’s reply comes as his administration faces pressure to submit a revised fiscal plan this month and next month’s expiration of a stay on lawsuits filed by creditors. The governor has asked for an extension on both deadlines, and the board said earlier this week that it was inclined to grant them.

The board also ordered Rossello’s administration to present a plan that would generate $4.5 billion a year in revenue or savings through 2019. Board members said Puerto Rico should reform its tax system and reduce health care and higher education spending as well as minimize the size of government in part by reducing payroll costs by 30 percent, among other things.