Fitial rejects $165.4M budget

Citing a drop of $8.7 million in the Finance Department’s revised revenue estimate, Gov. Benigno R. Fitial rejected yesterday the Legislature’s proposed $165.4-million budget plan for fiscal year 2009.

Fitial acknowledged the hard work of both the House Ways and Means Committee and the Senate’s Fiscal Affairs Committee in working to pass a budget but said the new revenue projections just don’t add up to a workable spending plan.

“The Secretary of Finance’s revised estimate cannot be ignored, as it would make me irresponsible and I would be neglecting my duties as mandated by the Constitution and laws of the CNMI had I approved this legislation,” said the governor in a letter to Senate President Pete P. Reyes and House Speaker Arnold I. Palacios.

Fitial pointed to two major sources of the revenue decline: Confirmed reports of the closure of three of the four remaining garment manufacturers on Saipan and Northwest Airline’s plan to stop the Osaka-Saipan route in March 2009.

“This is a considerable reduction in resources that will not support the implementation of the programs proposed to be funded under the budget legislation,” the governor said.

The chief executive urged the Legislature to pass measures to re-implement non-working alternate Fridays (called “austerity Fridays”), implement non-paid holidays, and reduce remittances to the Retirement Fund.

“These cost-cutting measures are critical to meet our constitutional requirement of a balanced budget and to continue delivering services to the people of the Commonwealth,” Fitial said.

The governor nixed the proposed budget just one day before the deadline for the administration to act on the bill. Had the governor not acted on the budget, it would have automatically become law.

The Legislature passed the $165.4-million budget for FY 2009 on Dec. 4, 2008. It includes provisions for 10.7-percent cuts against agencies funded by the central government. The proposed budget excludes the self-funding Department of Public Lands, which will get $3.1 million, and autonomous agencies.

Fitial said that, while he recognizes the need to approve a budget for FY 2009 for government operations, Finance Secretary Eloy Inos’ revised estimates of this year’s revenues compel him to disapprove it as resources have been severely reduced and continue to decline.

Fitial also cited eight sections of the budget measure that, according to him, required his disapproval:

Fill time equivalent positions are zeroed out despite the fact that there continues to be at least one existing employee and other pending obligations in the CNMI Government Health and Life Insurance department.

The Finance Secretary is required to submit an itemized report on the expenditures for personnel and operations of each Executive Branch department and agency to the Legislature at the end of each quarter.

Resident department heads salaries are raised by an additional $9,000 per annum; from $36,000 to $45,000 when no other position is being increased and when division chiefs and special assistants of principal executive departments are capped at $40,800.

Specific amounts are appropriated for subsistence allowances for the Superior Court and the Supreme Court with no restrictions on which employment contracts they may or may not apply to, while another section in the bill restricts the Department of Public Health by barring employment contracts entered into on the day after the measure goes into effect.

A section of the bill addresses appropriations for the Legislature and provides contradictory provisions that leave one to pick and choose which subsections to follow in administering its administrative provisions.

Only $4 is appropriated for the Deportation Fund Program, yet a section in the bill requires the transfer of all Immigration personnel who are not employed by the federal government when the U.S. Department of Homeland Security assumes control of immigration in June 2009.

Appropriations for various independent programs that “seems as though the numbers were arbitrarily designated without a full understanding of what is needed.”

The Northern Marianas College is not appropriated a separate amount for utilities.

Considering the reduction in resources, and keeping in mind that appropriations for the remainder of this fiscal year must be reduced to compensate for funds already spent since Oct. 1, 2008, Fitial is urging the Legislature to pass a bill to reduce the government’s current expenses.