Budget faces cuts with less Compact and CIP funding

The Fitial administration’s proposed Fiscal Year 2010 budget of $162.82 million faces cuts due to a projected $2 million to $3 million reduction in Compact Impact funding, while the Office of Insular Affairs’ capital improvement project appropriation for the CNMI will also be lower than in previous years.

From $11.3 million in FY 2009, OIA’s CIP funding for the CNMI is expected to reach only close to $11 million, OIA federal CIP coordinator Keith Aughenbaugh told Saipan Tribune on Friday.

“It’s a little bit less than the previous year. But as of now, the figure is preliminary,” Aughenbaugh said.

On Saturday, Gov. Benigno R. Fitial said the administration expected Compact Impact funding to be “significantly reduced” and this will lower budget projections for FY 2010.

He said Finance will work with the Legislature to reflect those changes in the budget.

The April 1 budget submission by the Department of Finance shows $5,171,916 in Compact Impact funding projection.

Rep. Ray N. Yumul, chair of the House Ways and Means Committee, and Sen. Maria “Frica” Pangelinan, chair of the Senate Fiscal Affairs Committee, jointly asked the Fitial administration on Thursday to clarify the projected Compact Impact funding in the FY 2010 budget.

Yumul and Pangelinan’s inquiry was in light of a recent statement made by acting Deputy Assistant Secretary for the U.S. Interior’s Office of Insular Affairs Nikolau Pula that the CNMI stands to lose $2 million to $3 million in Compact Impact funding due to lesser migration of Freely Associated States citizens to the islands.

“Please bring our offices up to date on this issue by either confirming that the $5,171,916 projected for FY 2010 is in fact accurate, or by amending the projected Compact Impact funding amount in the governor’s budget proposal,” Yumul and Pangelinan said in a May 7 letter to Esther S. Fleming, acting special assistant for Management and Budget, and acting Finance secretary Robert Schrack.

The U.S. Census Bureau reported a 41 percent decline in the FAS citizen population in the CNMI, now at only 2,001.

The FAS includes Palau, the Marshall Islands and the Federated States of Micronesia (Yap, Chuuk, Kosrae and Pohnpei).

Under a Compact between the United States and FAS, citizens of FAS are free to travel, work and study in the U.S. and its territories without U.S. visas.

Guam, Hawaii, American Samoa, and the CNMI share $30 million in Compact Impact funding that the Interior Department releases every year. The federal funding goes mainly to health, social service, public safety, and education agencies for accommodating or providing services to FAS citizens.

Yumul, in a telephone interview, said he and Pangelinan continue to work on the FY 2010 budget. He said among the biggest concern is the Compact Impact funding.

The governor’s budget proposal estimates gross budgetary resources to reach $162.82 million in FY 2010, which runs from Oct. 1, 2009 to Sept. 30, 2010.

Some $4.65 million of this amount is earmarked for tobacco control, solid waste management, and the Commonwealth Utilities Corp.’s debt to the Marianas Public Land Trust. In addition, $7.67 million will go to payment of debts.

Pangelinan earlier said by the time the budget proposal reached the Legislature on April 1, many things have changed. She said by law, the governor makes the budget projections and is the only person who can change the numbers. “We can only question the projection, we cannot change it,” she said.