Budget talks grind to halt; Inos blasts the Legislature

In a split vote yesterday, the six lawmakers tasked to settle a fiscal year 2016 budget bill remained in deadlock over a “compromise” provision that would have allowed the reallocation of Marianas Visitors Authority earmarks to fund a shortfall for the local hospital’s utility bill.

The deadlock has prompted the administration of Gov. Eloy S. Inos to review its options in preparation for a possible—and increasingly likely—government shutdown by Oct. 1.

The Senate says these earmarks will make up for the hospital subsidy redirected to fund proposed salary increases for department heads, among others. But the House of Representatives maintain that hospital funds should not be touched in the first place.

The continuing impasse prompted Inos to call out the Legislature yesterday and ready his Cabinet and agency heads for a possible government shutdown.

In a statement yesterday afternoon—after a stalemate in the bicameral panel’s morning session—Inos called the Legislature “irresponsible” if they failed to act on a budget before the end of the fiscal year.

“In view of today’s impasse between the members of the Senate and the House, I am considering various options available including a possible government shutdown. …My office has complied with the constitutional mandate to submit a budget before April 1 of this year,” Inos said.

Inos said the gridlock “leaves me without many options.”

“I am therefore informing the Cabinet and agency heads to prepare for the possibility of a government shutdown of operations for non-critical personnel [and] services,” Inos said.

The end of the fiscal year is on Sept. 30, some 14 days away. If no budget is passed and signed by the governor in time, the CNMI could suffer a partial government shutdown amid recovery efforts after Typhoon Soudelor left the CNMI in a state of disaster.

Yesterday, the House and Senate agreed on a “compromise” provision that allows the Legislature to modify MVA’s budget within their appropriations act on the table. The House disagreed, though, with language the Senate attached to that provision.

Senators called for a motion to adopt the provision to include a section that will provide for $530,000 to Customs for x-ray machines and $2 million to the CHC subsidy.

The House insisted, though, that they adopt the administrative provision itself, and then decide from there, where and how much from MVA they were going to reallocate or tap.

“I think in principle we were looking at the $2.53 million coming from MVA,” said Rep. Antonio Sablan (Ind-Saipan) after the meeting. “Where we continue to disagree is how [the fund] is going to be used.”

“The House is insisting to leave the $2 million alone that is originally included for the hospital, and use the $2 million from MVA to fund [the Senate’s] activities, their amendments [in the budget bill],” he said.

“We maintain the position that we do not touch the CHCC subsidy,” Sablan added.

When a vote was called, it was a split three-to-three among the three House members and three Senate members on the bicameral committee.

The CNMI Constitution requires that the Executive Branch submit a budget by April 1 of each fiscal year. The Senate and the House then have up to Sept. 30 to pass a balanced budget or risk a government shutdown, including the suspension of their salaries, the salaries of non-critical government employees, and the suspension of payment for government services.

“It will be irresponsible for the CNMI Legislature if they fail to pass a budget,” Inos said, “and it is an injustice to take away people’s only source of income, most especially during this time when people are already suffering the horrible effects of Typhoon Soudelor.

“The devastation caused by Typhoon Soudelor has put great pressure on people’s income. They now find themselves paying more for food, for home repairs, for fuel, for their children’s school supplies and uniforms, and so on.

“I ask the people of the CNMI to join me in calling for your legislators to produce a budget, without further delay, that is acceptable for my approval. We have yet to truly feel the impact on our government resources from the loss of business gross receipts tax resulting from the damaged undersea telecommunications cable and the devastation from Typhoon Soudelor. We, accordingly, need leadership and a budget to plan our recovery efforts for the next fiscal year, and it is an unnecessary shame that we have to come to this,” concluded Inos.