‘PROBLEMATIC PROVISIONS’

The 12 provisions in the newly enacted budget for fiscal year 2012 that acting governor Eloy Inos identified as “problematic” are:

1. SUSPENSION OF MANDATED FUNDING FOR THE OFFICE OF THE PUBLIC AUDITOR. Public corporations or autonomous agencies are expected to timely remit their 1 percent OPA contribution to Finance, while business units funded by legislative appropriation must cut their funding level by 1 percent from that listed in this budget authority “to reflect their exemption from remitting 1 percent of their budget to OPA as the Legislature has already appropriated those funds to other business units in this measure.”

2. RESTRICTION ON FUNDING CUTS FOR THE LEGISLATURE AND THE JUDICIARY. Section 501(c) requires legislative approval in the event that the general fund experiences a budget shortfall requiring reduction of resources. Inos said this restriction is inherently inequitable and will force the Finance secretary to violate her constitutional duties.

3. HIRING RESTRICTIONS. Inos said that Section 602(b) is open to abuse as a Request for Personnel Action, or RFPA, could be submitted on the 90th day by any department or agency without having identified a person to fill such position to avoid position elimination. Inos said the correct procedure is through the use of the Notice of Personnel Action initiated by the Office of Personnel Management as this indicates that applicants have applied, an eligibility list was provided, qualified candidates were interviewed, and the best candidate was chosen.

4. PAY FOR LEGAL HOLIDAYS. Section 605 allows pay for legal holidays should sufficient funds be available in the respective business unit’s account or should the governor declare a specific holiday a paid one. Inos said government employees availing of these privileges must apply for annual leave on such days.

5. INCREASED FUNDING FOR THE LEGISLATURE. The House initially passed a budget with the same level of funding as submitted by the governor, while the Senate lowered it by $3 million. The conference committee ultimately increased it by 87 percent more than the Senate version or 29 percent more than the governor’s submission.

Inos said the total increase for the Legislature of 29 percent amounts to $1.224 million of which $429,000 was allocated to the Legislative Bureau, reflecting a 42-percent increase for the LB.

“This increase exempts the Legislative Bureau from any austerity work hours that will be borne by other government departments and agencies,” he said.

6. SCHOLARSHIP. Section 401(b) allots disbursement of student financial assistance funds in the first and second quarter of the fiscal year to coincide with the fall and spring semester of the school year. This could present problems in terms of cash flow if disbursements were to be made in the first months of each quarter.

7. INCREASED FUNDING FOR ROTA. Section 705 increases funding for the Mayor of Rota by $50,000; for the Municipal Council of Rota by $10,000; and Rota-Department of Public Safety by $10,000.

Inos said that “no discussion or justification was provided for such increase” for Rota’s funding.

8. INCREASED FUNDING FOR TINIAN. Section 706 increases funding for Tinian by $182,719 which includes an increase of $56,622 for the Municipal Council; $10,000 for Customs; $40,000 for the Economic Development of Tinian; $30,000 for DPS-Police; over $7,000 for the Mayor of Tinian; and over $48,000 for the Tinian Public Library.

Inos said “again, these increases lack justification, with the exception of the Municipal Council, which is mandated to utilize $9,600 for office rental, $10,000 for office operations and $35,000 for public programs.”

“Still, the governor’s submission included operations funds for the Municipal Council, making this increase puzzling. The increases in either the first or second senatorial districts may have been to bring those municipalities to equal levels of funding as reflected in this measure,” Inos said.

9. INCREASED FUNDING FOR MAYOR OF SAIPAN. An additional 10 positions were added to the Office of the Mayor without additional funds for personnel. However, the operations account was increased by $170,000.

10. DRASTIC CUT IN FUNDING FOR THE MARIANAS VISITORS AUTHORITY. The Legislature cut MVA funding by 56 percent compared to the governor’s submission. Inos said this is “alarming,” considering that MVA provides service for the CNMI’s sole economic industry: tourism.

“This is a serious problem for MVA as they continue to counter decline in the tourism industry. It was the understanding of the administration that the Senate would pass HB 17-179 simultaneously with this appropriations act to supplement the MVA’s budget since the Legislature slashed 56 percent of the MVA’s operations budget,” Inos said.

The acting governor said that failure to pass HB 17-179 “will cripple MVA’s promotional activities, thereby affecting the rest of the Commonwealth’s economic activities.”

11. ASSOCIATION OF PACIFIC ISLAND LEGISLATURES FUNDING. While APIL is listed under independent programs, Inos said this program should be appropriately listed under the budget of the Legislature.

12. SUBSTANCE ABUSE PREVENTION FUNDING. Section 701(f) gives $77,162 for personnel and operations of the Substance Abuse Prevention Program. Inos said this section is problematic as it is a new program that was not previously funded for and is now included in the law despite the lack of a spending plan in place.

Inos said the Substance Abuse Prevention Program is an existing program under the Community Guidance Center, a federally funded program, which operates independent of local appropriations.

“The addition of this section is puzzling as the Department of Public Health neither requested nor needed this funding,” Inos said.