‘Critical agencies face no budget cuts’

Critical public services will be exempted from the 10.7-percent across the board budget cut now being considered by lawmakers to eliminate the government’s $9-million projected shortfall in the current fiscal year.

Sen. Maria Frica Pangelinan, chairwoman of the Senate Committee on Fiscal Affairs, said the reduction will not apply to the Department of Public Health, Department of Public Safety, Department of Corrections, Public School System, and Northern Marianas College.

The 10.7-percent cut came after concerns were raised about the previous budget version, which proposed to appropriate $9.1 million more than expected revenues and leave the governor to decide where to make the cuts.

Pangelinan indicated yesterday that the Senate is ready to approve the proposal, which will result in a balanced budget. At press time, the House of Representatives reportedly was meeting to discuss whether to accept the proposed cut, make additional exemptions, or make further reductions against some departments in order to give more to others.

“At least the House finally recognizes that the Legislature must make the cut rather than have a provision for the Governor to make the cut. I believe they are meeting right now and will be letting the Senate know of their final decision,” said Pangelinan.

She added, “What I eventually hope to see is to allow each department head to make the decision where to cut costs to meet their budget shortfall without sacrificing public services. Regardless of how one shifts the numbers, one cannot avoid the fact that the shortfall must be addressed and at best be proportionately shared by each agency.”

The government expects to collect $169.55 million in revenue from Oct. 1, 2008, to Sept. 30, 2009. Of this amount, $12.85 million will go to debt service and other pre-existing obligations, leaving $156.7 million available for government operations.



Lawmakers propose to augment this with $3.5 million from several sources outside the general fund, and $5.17 million in “Compact Impact” funds, which is federal government’s reimbursement to the Northern Marianas for the cost of hosting citizens from Micronesia. These additional funds bring to $165.37 million the amount available for government operations in the 2009 fiscal year.



If approved, the last budget bill would have provided for a total of $174.47 million in expenditures, about $9.1 million more than the available funds. It also proposed to reject the governor’s proposals for balancing the budget, including a reduced retirement contribution rate, a no-work-no-pay policy on legal holidays, and a biweekly shutdown of government offices. Instead of proposing cuts to balance the budget, it set out statutory provisions that the governor could use to keep costs down.