$134.33M budget bill for FY’15 goes to conference committee

With barely a month before the deadline, the CNMI government’s $134.33-million budget for fiscal year 2015 now rests with a bicameral conference committee tasked to come up with a “compromise” spending plan. This came about after yesterday’s rejection by the House of the Senate-amended budget bill over an unconstitutional provision, salary increases, and advance quarterly allotments, among other things.

“This is not a numbers issue but one about principles and policies,” House Ways and Means Committee chair Tony Sablan (Ind-Saipan) told Saipan Tribune.

House Speaker Joseph Deleon Guerrero (Ind-Saipan), right, confers with Marianas Visitors Authority managing director Perry Tenorio, left, during a short House session recess yesterday afternoon right before rejecting a Senate-amended $134.33-million budget bill that now goes into conference. Also in photo are Sen. Pete Reyes (Ind-Saipan), background left, and Rep. Tony Sablan (Ind-Saipan). (Haidee V. Eugenio)

Sablan said he does not see why a conference committee cannot reach a compromise on the problematic provisions within days.

The main bone of contention is a Senate provision that the House deems “unconstitutional,” allowing a waiver on any electronic gaming licensing fees, machine fees, and CNMI taxes up to $400,000 assessed against private firm Bridge Capital LLC or its assigns for fiscal year 2015 and offset it with the total amount of $400,000 that the CNMI government owes Bridge Capital for unpaid La Fiesta leases.

Some House members call it “more than a sweetheart” deal.

That’s because once the bill becomes law in its current form, it allows Bridge Capital to “sell or transfer” these credit amounts to any entity that has an electronic gaming license on Saipan.

House members said the provision, offered by Senate Vice President Victor Hocog (R-Rota), opens the floodgate for other private entities that are owed money by the government to also seek similar credits or deals.

“The CNMI government is basically giving a company credit of $400,000. …This company can outright sell these credits to companies with electronic gaming licenses. Both our counsels said that would be unconstitutional,” Vice Speaker Frank Dela Cruz (Ind-Saipan) said during session after a motion was made to reject the Senate-amended budget bill.

By a vote of 15-0, the House approved at 3:24pm the rejection of the latest version of the budget measure, effectively sending it to conference.

House Speaker Joseph Deleon Guerrero (Ind-Saipan) immediately appointed three House members to the conference committee: Sablan as Ways and Means chairman, Dela Cruz, and floor leader Ralph Demapan (R-Saipan).

Sen. Pete Reyes (Ind-Saipan) said that Hocog, who is currently acting Senate president, is expected to appoint the Senate conferees as early as today. They include Fiscal Affairs Committee chair Jovita Taimanao (Ind-Rota), Sen. Frank Cruz (R-Tinian), and Reyes himself.

Sablan, chairman of the House conferees, said he looks forward to an immediate start of meetings once the Senate appoints its conferees.

Unlike previous budget seasons when the sticky points were mainly on the amount of funds for certain agencies, this year is more on administrative provisions.

“And there are only a few items,” Sablan added.

Also among the problematic provisions is salary increases of up to more than $15,000 including those for the Finance secretary and directors.

Some lawmakers are also crying foul over cuts in House and Senate members’ operational funds by some $7,000 to be able to give Tinian close to $400,000.

“A three-month advance allotment, I don’t think that’s responsible budgeting,” Sablan said after the session. This was one of the Senate amendments to the budget.

Dela Cruz, during the session, also pointed to a budget provision that allows the Department of Public Safety to hire its own legal counsel with a salary of $57,000.

“We’re a bit concerned because funds are being taken away from the Office of the Attorney General and the [soon-to-be] elected attorney general. …The [Ways and Means] Committee felt that the elected AG would be the arm of government that will represent all government agencies and departments,” Dela Cruz said.

Without a timely passed budget, the government would have another partial shutdown.

PSS, NMC

The House agrees on the Senate’s 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 the conference committee is expected to tighten the language on the PSS budget provision to ensure there won’t be unnecessary salary increases and that priority is the hiring of new teachers to reduce teacher-student ratio in classrooms.

Rep. Ralph Yumul (Ind-Saipan), during session, asked that the Marianas Visitors Authority’s personnel and “all others” budget should not be zeroed out and should have at least $1 so that when government finances improved, funds can be reprogrammed for MVA.

MVA oversees the CNMI’s only industry, tourism. The budget added to PSS came from MVA’s.

NMC president Dr. Sharon Hart, in a letter sent yesterday to the House speaker, appealed once more for additional financial support for NMC.

She pointed out that the CNMI government will be incompliant with the U.S. Department of Education’s maintenance-of-efforts requirements by some $157,000 if no additional funding is given to NMC.

Hart said the Senate’s over $4.835-million budget proposal for NMC “severely compromises” the college’s ability to meet the College Access Challenge Grant MOE requirement for fiscal year 2015. If the CNMI fails to meet that requirement, NMC would lose its $1.392 million award under this program for fiscal year 2015.

Sablan, as head of the House budget conferees, said NMC’s concern will be one of the items for consideration as the House and Senate conference committee works on a compromise budget bill.

Top NMC and PSS officials attended the House session.