Senate fiscal panel starts work on FY’10 budget

The chair of the Senate Fiscal Affairs Committee is beginning work on the Fiscal Year 2010 budget.

By the time the budget proposal reaches the Legislature many things have changed, said Sen. Maria Pangelinan. The administration submitted its proposal to the Legislature on April 1.

The first step the senator is taking in the budget process is sending out letters to all department heads confirming employee numbers. This holds the department accountable as well, she said, because once the budget passes the department head can’t come back and lobby for changes.

“I always give them this opportunity to make sure we get this critical information so nobody is left out,” she said.

By law the governor makes the budget projections and is the only person who can change the numbers, Pangelinan said.

“We can only question the projection, we cannot change it,” she added.

In the April 1 budget proposal, Finance Secretary Eloy Inos said the Department of Finance estimates gross budgetary resources to reach $162.82 million in Fiscal Year 2010, which runs from Oct. 1, 2009, to Sept. 30, 2010.

However, some $4.65 million of this amount is earmarked for tobacco control, solid waste management, and Commonwealth Utilities Corp.’s debt to MPLT. In addition, $7.67 million will go to payment of debts.

The FY 2010 revenue estimate represents a net increase of $2.416 million or 1.6 percent over the current mid-fiscal year estimate.

The total operating budget is $159.06 million. Of that, $8.56 million will come from non-general fund resources, like Compact Impact funds and expense transfers to certain special and revolving funds. The remaining balance of $150.5 million will be funded through appropriations from the general fund.

If everyone agrees with the proposal, then the Legislature sets limits on expenditures by passing a House concurrent resolution by July 1. By Sept. 1, the Legislature completes action by introducing and passing a budget bill, setting the spending ceiling.

The FY 2010 budget is a slight increase over the FY 2009 budget because the administration is anticipating a small boost from the U.S. economic stimulus funds.

In the budget proposal, the administration estimated the CNMI’s general fund will see an additional $15 million from the American Recovery and Reinvestment Act, which will help offset the loss of fees related to Public Law 110-229. The Consolidated Natural Resources Act of 2008 extends U.S. immigrations laws to the CNMI beginning Nov. 28. This will mean a loss of $7.6 million in labor and immigration fees and $6.1 million in one-time transfers, for a total of $13.7 million.

Rep. Ray Yumul, chairman of the House Ways and Means Committee, said he is concerned about allocating the $15 million when much of the stimulus funds have not yet been received.

“What if the stimulus doesn’t come in? What if there are delays?” the chairman asked, adding that there is also the possibility the CNMI may not comply with the grant terms and would be forced to return money that is already allocated.

Another important thing to consider is the Retirement Fund, Yumul said.

“Retirement is still on the top of my list, ensuring that is must be funded. They must receive their allocation,” he added.