‘Budget bill a step in right direction’

The chairwoman of the Senate Fiscal Affairs Committee expressed has her disappointment with the governor’s veto action on the budget for Fiscal Year 2009, countering the concerns raised by the island’s chief executive.

“The bill vetoed by the governor tightens controls on spending and reporting. …While not the entire solution to the fiscal problems of the CNMI government, it is a step in the right direction,” said Sen. Maria Frica Pangelinan in her message to the Senate’s presiding officer.

She claimed the governor’s reasons for the veto action deserve clarification.

The governor had cited that the Legislature failed to address how the same number of employees and the same programs and operations will continue at the same level with reduced resources.

Pangelinan said under the Planning and Budgeting Act, the Legislature is authorized to set maximum FTE levels and these numbers mandate that an expenditure authority may not exceed the number.

“There are no restrictions on employing fewer,” she said.

Additionally, she said there is nothing in the budget bill that supports the governor’s statement that salaries remain intact. Pangelinan said the bill does not address that level of detail.

“In fact, it is appropriate for each expenditure authority to look at their allocation for personnel expenses and adjust their employment levels accordingly,” she said.

Pangelinan disagreed with the governor’s claim that the budget bill, if passed, could lead to payless paydays, government shutdown and layoffs and that the only option is to implement austerity measures.

“I disagree that there is no other option beyond austerity measures. These measures proved to be fundamentally unfair in their application, not only to lower paid employees but also because of the many arbitrary and politically driven exemptions that were made,” Pangelinan said.

She pointed out that the net savings during the period in which these austerity measures were applied was less than predicted. “The measures simply did not work as projected,” she said.

The fiscal affairs chairwoman indicated that implementing austerity measures while allowing hiring to continue without strict controls makes no sense.

Although the provision was in the first budget bill, this time the governor objected to the reporting requirements for the Labor Department, saying it has no bearing on the budget process.

“The report from the Labor Department will in fact be crucial during the budget process for FY 2010. The Legislature needs to know how the department is functioning with the workload and employment levels they are operating with in order to properly support their efforts,” Pangelinan said.

On the Compact Impact funds that Fitial said are improperly distributed in the budget plan, Pangelinan said that provision was in the original budget proposal and was equally matched in the second budget submission.

“This is unchanged in the current bill,” she said, adding that this raises questions about why the Legislature was not notified via a budget amendment as provided by law.