$400K govt debt offsetting scrapped; other budget problems addressed

House Ways and Means Committee chair Tony Sablan (Ind-Saipan), second from left, and Senate Fiscal Affairs Committee chair Jovita Taimanao (Ind-Rota), second from right, lead yesterday’s meeting of the six-member bicameral committee, along with counsels and legislative staffers, to come up with a compromise version of a $134.33 million budget for fiscal year 2015.  The meeting resumes today and a budget bill could be passed on Friday by both the House and Senate. (Haidee V. Eugenio)

Lawmakers working on a compromise $134.33-million budget bill for fiscal year 2015 emerged from a daylong meeting at almost 5pm yesterday with more than half of so-called “sticky” issues already resolved, including a decision to scrap a provision waiving Bridge Capital LLC’s taxes and gaming license fees to offset the government’s $400,000 debt for non-payment of lease on La Fiesta.

House Ways and Means Committee chair Tony Sablan (Ind-Saipan) and Senate Fiscal Affairs Committee chair Jovita Taimanao (Ind-Rota), co-chairs of the six-member budget conference committee, said a budget bill is expected to pass on Friday.

If the conference committee report is finalized and adopted today and the budget bill passes the House on Friday morning and the Senate in the afternoon, the CNMI government’s 2015 spending package could be on the governor’s desk this weekend.

Sablan and Taimanao, in a joint interview after the meeting, said the House and Senate conferees also agreed on an additional $1.6 million for the Public School System, and $1.161 million of that is specifically for PSS to hire 35 new teachers to reduce student-teacher ratio.

The $1.161 million came from funds that the House originally appropriated for the Marianas Visitors Authority and transferred by the Senate to PSS. The remaining amount came from other sources.

The two co-chairs also said the conferees agreed to “restore” nearly $400,000 to Tinian. That amount is taken from lawmakers’ operational accounts and leadership accounts.

Sablan said the House conferees agreed to this Senate amendment on the ground that it is a “restoration” and not an increase in Tinian’s budget.

Taimanao and Sablan said a Senate amendment to the bill allowing for a $400,000 government debt offsetting will no longer be in the budget bill that will come before the full Legislature on Friday.

Some House members earlier said the provision is “unconstitutional.”

“There are some constitutional issues, there are some policy concerns and I think we are glad that both sides have come to the conclusion that at this point, it’s better to take it out,” Sablan said.

Taimanao, for her part, said if this specific amendment is allowed to go through, then other entities or individuals that are owed money by the government will also start asking for the same treatment.

The Senate-added provision, offered by acting Senate vice president Victor Hocog (R-Rota), allows 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 for fiscal years 2014 and 2015.

The Senate amendment also allows Bridge Capital to “sell or transfer” these credit amounts to any entity that has an electronic gaming license on Saipan.

While this provision has been removed, the La Fiesta lease payment account remains at $1 instead of being zeroed out so that the government can easily transfer money to it when funds become available.

Other provisions that are expected to be tackled and finalized today are the Senate’s amendment to allow certain salary increases and advance quarterly allotments, among other things.

A new budget bill has to be in place by the start of fiscal year 2015 on Oct. 1 or the government would have to partially shut down again, just like in 2010, until the Legislature passes a budget agreeable to both chambers.

But Sablan and Taimanao said a budget bill will be passed as early as Friday, three weeks ahead of the budget deadline.

Besides Taimanao and Sablan, the other conferees are House vice speaker Frank Dela Cruz (Ind-Saipan), House floor leader Ralph Demapan (R-Saipan), Sen. Pete Reyes (Ind-Saipan), and Sen. Frank Cruz (R-Tinian).

Also in yesterday’s conference committee meeting were legislative counsels and other Legislative Bureau staffers.

The conference committee meeting resumes this morning.