House to nix Senate budget version

After a leadership deliberation yesterday, the House of Representatives has decided to reject today the Senate version of a $134.33-million budget bill for fiscal year 2015 over concerns on a waiver of up to $400,000 in gaming fees and other CNMI taxes for Bridge Capital LLC to offset government debt to the firm on unpaid La Fiesta leases, salary increases of up to more than $15,000, and cuts in lawmakers’ operational funds, among other things.

Another House concern is the Senate’s insertion of a provision that allows senators a three-month advance on allotments.

A bicameral conference committee will be immediately formed to hash out the budget differences between the House and Senate.

This comes five weeks before the Sept. 30 deadline to pass and enact a new budget. Without a timely passed balanced budget, the government would have another partial shutdown.

Ways and Means Committee chair Tony Sablan (Ind-Saipan) said yesterday that while House members agreed to major Senate amendments as he earlier told reporters, other provisions of the latest budget bill version proved to pose more serious concerns.

“After the budget rejection, we will go into a conference,” Sablan told Saipan Tribune.

The House remains in support of a $1.6-million budget increase for the Public School System, and a $200,000 increase for the Northern Marianas Technical Institute, among other things.

“But we need to tighten the language on the PSS provision. The priority is the hiring of 35 new teachers to reduce student-teacher ratio,” he said.

The Senate version of the bill allows salary increases for some PSS employees, mainly those affected by the scheduled 50-cent increase in minimum wage on Sept. 30.

‘La Fiesta provision’

Sablan said House members are wary of a “bad precedent” that will be set by a Senate amendment allowing the government to waive any electronic gaming license fees, machine fees, and CNMI taxes up to $400,000 assessed against Bridge Capital LLC or its assigns for fiscal year 2015 to offset the government’s $400,000 debt to Bridge Capital for two-year unpaid leases on the former La Fiesta Mall. Bridge Capital owns the property.

“House members basically want that waiver and offset provision removed—the provision basically says everybody owed money by the government should be afforded that privilege. It sets a bad precedence,” Sablan said.

The $400,000 represents the government’s unpaid leases on the La Fiesta property for fiscal years 2014 and 2015 amounting to $200,000 each.

That same provision offered by Senate Vice President Victor Hocog (R-Rota) and approved by seven senators further states, “provided that Bridge Capital LLC can sell or transfer these credit amounts to any entity that possesses an electronic gaming license in the Third Senatorial District” or Saipan.

Rep. Ralph Yumul (Ind-Saipan) said this Senate-added provision is “unconstitutional.”

Sablan also said the government owes many other private entities, not just Bridge Capital.

Salary increases

Sablan and Yumul said another provision that House members object to is the Senate’s decision to increase certain secretary and directors’ salaries by up to $15,000-plus.

“For some members, the increases are too much,” Sablan said.

The Senate version of the budget bill gives the Finance secretary an up to $70,000 annual salary, or a $10,000 increase. Yumul said the current salary for this position is $60,000.

Senators also gave the Customs director a salary increase of up to $15,734 or from $49,000 to up to $65,000, Yumul said.

The CNMI Treasurer also gets a little over $7,000 salary increase, from the current $46,920 to up to $54,000 as senators approved.

The Revenue and Taxation director’s salary from the Senate is up to $65,000. The last time the post was filled, around 2008, the salary was $50,000.

The House, in its 2015 budget, gave an $80,000 salary for the Rev&Tax director but the Senate dropped it to $65,000.

Senators also approved increasing the salaries of Tinian and Rota resident department heads up to $45,000 “based on the availability of funds.”

Lawmakers’ allowance cuts

Rep. Roman Benavente (Ind-Saipan) said he does not support reducing each lawmakers’ operational funds from $76,000 to $69,000-plus to give Tinian nearly $400,000.

“A $7,000 cut in operational funds makes a lot of difference,” Benavente said. His sentiment was shared by other House members.

Yumul, however, said he does not have a problem restoring $400,000 for Tinian and reducing lawmakers’ operational funds.

Sablan, meanwhile, said he would recommend to House Speaker Joseph Deleon Guerrero (Ind-Saipan) to appoint the same budget conferees: himself as Ways and Means Committee chair, Vice Speaker Frank Dela Cruz (Ind-Saipan), and floor leader Ralph Demapan (Cov-Saipan).

“But of course, it would be up to the speaker,” Sablan, author of the budget bill, added.

Rep. Christopher Leon Guerrero (Ind-Saipan) said he was also expecting a conference committee on the budget, as is always the case every budget season.

The 2015 budget bill’s latest version is House Bill 18-201, House Draft 3, Senate Substitute 2.