‘House likely to scrap Senate-passed budget’

The House of Representatives looks set to snub the Senate-passed version of the budget because of the cost-cutting measures included in the bill.

The fiscal year 2009 budget is on top of the agenda for the House session this afternoon. House Speaker Arnold I. Palacios yesterday said the Senate’s budget proposal will be placed on the House floor for debate, and will likely be rejected.

If this occurs, the House and the Senate will each appoint members to a joint conference committee that will draft a bill acceptable to both houses.

“We will definitely reject the Senate substitute [to the bill originally passed by the House],” said Rep. Victor Hocog, chairman of the House Ways and Means Committee. “We want to do away with any austerity provisions. People are crying because of financial hardship. We don’t want to add to their burden.”

Under the Senate’s version of the budget, government offices will be closed every other Friday from March 6, 2009 through Sept. 18, 2009—a total of 10 “austerity Fridays.” In addition, a no-work-no-pay policy will be applied on the 13 remaining legal holidays within FY2009. Both provisions are designed to cut the government’s personnel costs in the short term.

Hocog said the House differs with the Senate on several other issues, including retirement contributions and the appropriation for the Executive Branch. But these issues are less critical than the austerity provisions.

“The main focus of the conference committee would be the austerity measures. On any other provisions, I’m very positive we can reach an understanding pretty easily,” he said.

The budget currently under deliberation is for the 2009 fiscal year, which covers the period from Oct. 1, 2008 to Sept. 30, 2009.

On Oct. 2, the House approved the original budget bill, appropriating $165.37 million in resources, including $156.7 million in projected government revenue, $5.17 million in Compact Impact aid, and $3.5 million of “unencumbered” funds from different accounts outside the general fund.

Last week, the Senate passed a substitute bill to replace the House-approved version. The substitute includes a host of changes to the House’s proposal. The Senate version requires the CNMI government to pay the NMI Retirement Fund at the actuarially recommended rate of 37.4 percent, and not at an artificially reduced rate of 11 percent as earlier reported.

Other amendments include providing itemized appropriations for the Executive Branch, lowering the cap for full time government workers, the governor to submit for legislative appropriation any “cover-over” tax recoveries from the U.S. government, specifying appropriation for utility costs and protecting them from reprogramming to ensure the government can pay the Commonwealth Utilities Corp., and cutting the public auditor’s fee from 1 percent to 0.75 percent of each agency’s budget.