Voluntary 10% pay cut urged among top officials

Top officials including the governor, lieutenant governor, lawmakers, justices, and judges are encouraged to waive 10 percent of their salaries as part of the Fitial administration-backed measure that also reinstates austerity Fridays/unpaid holidays, cut employer contribution to the Retirement Fund from 18 percent to 11 percent, and grant full reprogramming power to all expenditure authorities.

The voluntary 10 percent pay cut is equivalent to eight hours per pay period.

It is made part of the standalone austerity bill introduced by Rep. Victor B. Hocog because the proposed unpaid legal holidays and austerity Fridays do not apply to the Constitutionally protected salaries of the governor, lieutenant governor, members of the Legislature, justices and judges.

Hocog introduced House Bill 16-223 on Friday afternoon, just a few minutes after the House held off voting on the override of Gov. Benigno R. Fitial’s veto of the budget bill.

Fitial vetoed on Tuesday the $156.76 million budget bill submitted by the Legislature for Fiscal Year 2009, which includes $148 million in local revenue collections, due to lack of austerity measures.

The administration thus sponsored a standalone austerity bill reinstating austerity Fridays by closing government offices on 12 Fridays until the end of FY 2009, hoping to save over $4 million in public funds.

But House members, during Friday’s session, said the original austerity Fridays and unpaid legal holidays did not save as much money as expected. Instead, House members want stricter hiring controls. They accuse the Fitial administration of hiring over 400 new employees despite the financial troubles of the government.

H.B. 16-223 applies the austerity Fridays to the following dates: Feb. 27, March 6 and 20, April 17, May 1 and 15, June 12, July 10 and 24, Aug. 7 and 21, and Sept. 18, 2009.

The measure also suspends five paid legal holidays: March 24 (Commonwealth Covenant Day), April 10 (God Friday), May 25 (Memorial Day), July 3 (Liberation Day-July 4), and Sept. 7 (Labor Day).

They apply to all civil service and excepted service employees of the government, with or without contracts, including those in the legislative, executive and judicial branches of government, as well as in autonomous agencies and municipal entities.

For each austerity Friday or unpaid legal holiday, hourly and salaried employees’ pay shall be reduced by eight hours.

There are some 4,000 government employees, including those at PSS and NMC. The Executive Branch alone has 1,800 to 1,900 employees.

H.B. 16-223 says all employment contracts entered into by the government shall contain a provision stating that the terms of such contract shall be superseded by any legislation enacted to reduce government payroll obligations by way of work hour reduction, government shutdown, furlough, or other measures adopted for the express purpose of fiscal austerity.

Exempted from the austerity Fridays and unpaid legal holidays are fully federal funded employees and department, agency or division of the local government.

The bill says the Public School System commissioner and Northern Marianas College president may exempt employees from the austerity Fridays and unpaid legal holidays, but all exemptions granted shall be transmitted to the Legislature.

Austerity Fridays scheduled by the PSS commissioner and NMC president shall occur on days when students are not in attendance, the bill adds.

Attorneys of all branches of government shall also be exempted, provided they report to work and record of their attendance is maintained.

H.B. 16-223 grants reprogramming power to expenditure authorities with respect to all budget activities, to ensure the delivery of public services.

It grants the governor unlimited authority to reprogram funding lapses realized from all budget activities, except the legislative and judicial branches, during the fiscal year to cover budget shortfalls, as he deems fiscally prudent and in the best interest of the public.

It also authorizes the governor to transfer qualified, operational expenses to the appropriate accounts which are unencumbered, including up to $3.5 million to be charged for operational expenses of the Department of Public Health to supplement its budget for operations.

They also include up to $823,500 which may be used to pay the NMI Retirement Fund to liquidate deficient employer contributions (excluding penalties) for employees who elected to retire prior to, and including, FY 2009.

Also included for reprogramming is up to $63,000 which may be used to cover the shortfall in the funding of the governors and lieutenant governors’ special retirement annuities from FYs 2006 through 2008, and up to $113,500 to be used to pay additional runoff claims to Aetna Global under the third party agreement with the Government Health and Life Insurance.

The nine-page bill also suspends earmarking of funds for certain programs for FY 2009.

To be suspended are the foreign national worker fund fees to NMC and PSS, and 10 percent of gaming jackpot tax to PSS.

Also to be suspended is the earmarking of 10 percent of general fund poker fees to the Human Resources Development Fund or the Workforce Investment Agency, and 50 percent to the Retirement Fund.

The austerity bill also suspends earmarking 70 percent of the hotel tax and 25 percent of the alcoholic beverage container tax to the Marianas Visitors Authority, and 30 percent of the hotel tax and 20 percent of the alcoholic beverage container tax to the NMI Retirement Fund.