Q&A: What’s up with the budget and why should we care?

Government agencies and employees are bracing to go over a fiscal year cliff less than 13 days away, without a budget in place to secure government services and paychecks past Oct. 1, the beginning of fiscal year 2016.

The onus is on the Legislature to agree on a budget bill for Gov. Eloy S. Inos’ consideration in time before a partial government shutdown. Here are some questions and answers about this dire situation.

Q: What does a shutdown mean for the CNMI?

A: Close calls with the fiscal year deadline were a repeated thing in the 2000s, as the Legislature and governor failed to pass a budget by the Sept. 30 deadline for fiscal years 2000, 2001, 2002, 2004, 2005, and 2006, legislative records show. However, the first government shutdown rocked the CNMI during Gov. Benigno R. Fitial’s time in 2010.

Saipan Tribune reported at that time that some 1,464 non-essential employees did not receive their paychecks when the government shutdown was in effect. With about 4,000 employees at that time, including federally funded positions, the government only paid for its most essential services.

Those who wouldn’t get paid include the governor, legislators, and employees deemed non-critical or non-essential. They will continue to be unpaid until such time that the Legislature passes a budget bill and Inos enacts the bill into law.

Also, the budget law won’t be retroactive. That means employees who are forced to stop working won’t be paid for the days they didn’t report for work.

Q: What about a continuing resolution? The U.S Congress does it all the time.

A: Not so fast. A continuing resolution essentially allows the government to operate on a budget formula based on the previous fiscal year and thus continue services and paychecks even without a new fiscal year budget approved.

But the 16th Legislature, via House Legislative Initiative 16-11, amended the NMI Constitution to prohibit the withdrawal of funds from the general fund without an appropriation made by law.  The initiative removed the ability of the government to go on continuing resolution in the absence of a budget. It allowed for the shutdown of government offices except for essential health, safety, and welfare services.

That initiative passed with 6,309 “yes” votes to 4,444 “no” votes in 2009, according to Commonwealth Election Commission records.

Q: So what deadlines did we blow?

A: The Inos administration submitted last March 30 a budget proposal of $145.8 million, narrowly beating its constitutional mandate submit a budget to the Legislature by April 1.

The Legislature is mandated to pass a budget bill before the fiscal year ends on Sept. 30. It can submit one right on Sept. 29 and still meet its constitutional responsibility. Even if late, the NMI Constitution gives Inos 20 days after the Legislature passes a budget to approve and sign the budget plan into law.

Q: What’s all the fuss about?

A: Debate among lawmakers has mostly centered on how senators propose to fund their “activity” within their version of the budget, as some House representatives put it.

To fund their provisions, senators propose to move money from the local hospital’s utility subsidy—which the House objects to—along with money for public streetlights. But the Senate maintains that this can be made up for by directing the Marianas Visitors Authority to “modify” its program budget to the tune of some $2.5 million that will be directed to the Divisions of Customs for some equipment and the local hospital for utilities.

The House, though, rejected this on Tuesday. They were ready to agree on principle to direct MVA to modify its budget, but were not ready to agree on the details.

Q: What are the Senate’s amendments?

A: The House committee originally adopted a budget; it headed to the Senate, and came back with some amendments, among others, that were rejected by the House, forcing the need to create a bicameral budget committee to resolve their difference.

Here are some of the Senate provisions:

Increasing the salaries for department heads on Rota and Tinian from $36,000 to $45,000;

Increasing Rota and Tinian budget from $500,000 to $600,000;

Boosting the leadership accounts of the House and Senate from the originally proposed $179,387;

Raising the annual salary of Tinian and Rota deputy commissioners to $45,000 per annum;

Increasing the $54,000 salary of the special assistant for management and budget/CIP administrator to “not less than $62,000;

Increasing from $70,000 to $80,000 the salaries of Public School System associate commissioners.