12 ‘problematic’ sections in budget

Acting governor Eloy S. Inos marked his 62nd birthday yesterday by, among other things, reluctantly signing into law a $102-million budget bill for fiscal year 2012 that is riddled with 12 “problematic provisions,” which the House and the Senate failed to address in a rush to prevent another partial government shutdown by Oct. 1.

While the atmosphere in the governor’s conference room during the signing was jovial, the acting governor’s five-page message to the Legislature accompanying the 38-page budget law was pointed.

Inos said the administration was “forced” to approve a bill that “could have been drafted with more care, precision, and fairness” had lawmakers not waited for the “11th hour” to tackle the budget.

It took the Legislature six months to pass the “problematic” budget bill.

“Still, the administration is relieved that our government employees will not have to endure the angst experienced last year during the shutdown period,” Inos said.

Gov. Benigno R. Fitial, who is expected to return for work today after a personal China trip for over a week, submitted his budget proposal to the Legislature on April 1.

While a partial government shutdown has been averted, hundreds of government employees will continue to receive a 16-hour cut biweekly and unpaid holidays under the new budget, which will go into effect on Oct. 1, the start of the new fiscal year.

This means regular work hours will still be 64 hours instead of 80 every two weeks.

“Problematic” sections of the budget include the Legislature giving itself a 29-percent increase in its funding—some $1.224 million higher compared to the governor’s budget submission—while cutting the funding for the Marianas Visitors Authority by 56 percent or from $5.030 million to $2.175 million.

MVA provides services to the CNMI’s only economic industry, tourism.

Inos reiterated his call for the Senate to pass House Bill 17-179, which seeks to charge passengers from non-U.S. destinations a new $15 “travel promotion fee,” collections from which will supplement MVA’s budget since the Legislature cut MVA’s budget by 56 percent.

Sen. Ralph Torres (R-Saipan) said the Senate will pass that bill this week, pending clarification of some provisions and terms in the bill.

The 2012 budget bill, introduced by Rep. Ray Basa (Cov-Saipan) and Vice Speaker Felicidad Ogumoro (Cov-Saipan), is now Public Law 17-55.

Basa, in an interview after the bill’s signing, said he’s extremely happy that a budget law was signed before the start of the new fiscal year, preventing another shutdown.

He said his Ways and Means Committee will heed the acting governor’s call to prioritize actions on the budget bill after the governor’s submission, and not wait for the last minute to introduce a bill.

“We promise, next year, we will introduce and pass a budget bill early,” Basa told Saipan Tribune.

Basa also chaired the eight-member conference committee that worked to break the budget deadlock between the House and Senate. The panel came up with the compromise bill that the House and Senate passed on Friday.

Inos was surrounded by lawmakers and Cabinet members when he signed the bill yesterday morning in the governor’s conference room.

While everyone in the room was relieved that there will be no shutdown, the acting governor’s written message sounded different from the way lawmakers congratulated each other on Friday night for passing a bill on Sept. 23, just days before the Sept. 30 deadline.

“I approve this measure despite its many problematic provisions in consideration of our government employees and government functions that need to continue,” the acting governor said in his message to House Speaker Eli Cabrera (R-Saipan) and Senate President Paul Manglona (Ind-Rota).

The $102-million budget for fiscal year 2012 is down from the $132 million budget law for fiscal year 2011, which was later revised to $122 million. Government budget used to be over $200 million but a toxic mix of problems led to the drastic cut in revenues coming in, mostly because of the tourism decline and the pullout of the garment industry.

While the Judiciary and Executive Branch will continue to be subjected to 16-hour cuts and unpaid holidays in fiscal year 2012, except for so-called critical government positions, the Legislature ended up not only being exempt from work hour cuts, but also got a 29 percent or $1.224 million increase in their budget compared to what the governor and the House had originally allocated.

Lawmakers’ salaries are constitutionally protected and only at least three of 29 members volunteered to cut their pay in solidarity with other employees.

The 29 lawmakers’ operational account—which they use to hire employees, among other things—went up to $78,000 compared to the $51,000 that the House had proposed and the “zero amount” the Senate earlier wanted. Because of this, lawmakers’ individual office employees are more likely to continue getting paid their full salary.

Moreover, of the $1.224 million increase in the Legislature’s budget, $429,000 is for the Legislative Bureau—a 42 percent increase from what was originally submitted.

Inos himself said in his message that the increase in LB funding “exempts” the LB from any austerity work hours that will be borne by other government departments and agencies.

The acting governor said the administration recognizes the additional funding provided for the operations for the Office of the Lt. Governor, which will primarily be used to restore the Marianas House in Washington, D.C.

He said this past fiscal year, funds were spent from the operations account of the Office of the Lt. Governor to make repairs and pay pending bills for the Marianas House.

“In addition, the balance will be used to supplement the shortfall in ARRA funds necessary to upgrade [the] CNMI’s financial management system,” he added.

Despite his concerns with other provisions, Inos said he is pleased that sufficient funds were appropriated for the Public School System and Northern Marianas College “so as to arm them with the resources needed to educate our students.”

The $1.190 million that was previously requested for scholarship awards has been transferred from the governor’s operations account directly to the NMC Scholarship Office.

This, along with additional funding as NMC requested, will allow it to meet the maintenance-of-effort requirement to receive the College Access Challenge Grant.

NMC will be getting a total of $5.2 million, the amount it requested.

As for PSS, the governor is authorized to transfer at least $500,000 from funds received from petitions filed pursuant to U.S. Public Law 110-229 for vocational educational curricula and program development.

PSS has a budget of $30 million.

The House and Senate passed a conference committee budget bill during back-to-back sessions on Friday.

The Legislature transmitted the budget bill to the administration on Saturday morning.

Had the Legislature and the administration failed to pass and sign a budget bill into law by Sept. 30, the constitutional provision on shutdown will kick in on Oct. 1. Last year’s budget deadlock wasn’t resolved until after almost two weeks of partial government shutdown, leaving over 1,000 government employees out of jobs for days.

It is unusual for the CNMI to have its budget law signed by an acting governor.

Inos is believed to be the first, if not the second, acting governor to ever sign a budget law.

For two consecutive years, the CNMI government passed and signed a budget law, but mainly because the Constitution was amended to ensure timely passage or there will be a shutdown.

It is also rare that a budget law is signed a week before the start of a new fiscal year.

Moreover, the acting governor signed the $102 million budget law on his 62nd birthday. He was born on Sept. 26, 1949.

During lunch break in the governor’s conference room, staffers surprised the acting governor with a birthday song and lunch.

Inos thanked the Office of the Governor and Office of Lt. Governor employees and others for their hard work. He said the past year has been tough, especially because he had just lost his wife.

The budget bill is House Bill 17-215, House Substitute 1, House Draft 5, Senate Substitute 1, Conference Committee Substitute 1.