Budget passes; shutdown averted

Gov. Eloy S. Inos puts pen to paper to sign his name on a $145-million fiscal year 2016 budget bill, effectively saving the CNMI from a government shutdown today. (OFFICE OF THE GOVERNOR)

Tourism money was cut and law enforcers’ salary raises were dropped, among others, in a $145-million budget bill for fiscal year 2016 that Gov. Eloy S. Inos signed into law yesterday afternoon.

Inos’ signature effectively averted an impending government shutdown if he had not signed a budget bill by today, Sept. 30, the end of the fiscal year.

“We have a budget and I will sign it,” Inos told a crowd of Cabinet heads, lawmakers, and administration officials who gathered at the governor’s conference room at 4pm to await Inos.

As soon as he signed the budget bill, Inos said, “No shutdown!,” to applause from the crowd gathered.

The governor arrived more than a half hour late to read through a draft letter describing his much anticipated budget decision and its line-item vetoes on provisions that the administration deemed unconstitutional or unfair.

Inos said it was “not a perfect budget,” but through vetting by the Executive Branch—which he conceded still had some disagreements over the measure—the administration arrived at a balanced budget to avoid a government shutdown.

Inos said he would approve a majority of the budget but disapprove some of the “problematic provisions in the administrative provisions of the bill.”

The House and Senate had modified Inos-directed hotel tax earmarks, effectively cutting $2.5 million from the Marianas Visitors Authority programs to fund other needs. That remained in the budget Inos signed yesterday afternoon.

The House and Senate also gave 5-percent salary increases for law enforcement personnel but Inos line-item vetoed this provision. For one, the provision did not give similar raises for personnel on Rota and Tinian, and two, the provision did not adequately source funding for the raises, Inos said.

The vetoed provision mandated that “5 percent of the law enforcement personnel budget appropriations” of various CNMI departments would be “allocated to provide for 5-percent salary increase of current law enforcement personnel.” But the provision did not define clearly where this money would come from.

Administration officials were concerned that this provision would essentially force departments to pull from their existing funds to support the increase. That could compromise other funding—for tires or bullets, for instance—officials earlier said.

“We find this [provision] to be unfair,” Inos said, referring to it as “controversial.”

“It does not cover salary increases for law enforcement in the first and second senatorial districts. It only applies to the third senatorial district. So we don’t believe that that’s a fair and equitable to allow for these increases to occur.”

“Secondly, it’s not clear how this increase is to be funded,” Inos said. “There are various scenarios, but in the end, there may not be a salary increase because there is just no funds available or associated [funds available].

“This is not to say we will never address this,” Inos added. “The Legislature should continue to deliberate on this issue.”

On the “redirection of MVA earmarks,” Inos said the Executive Branch found this provision to be “detrimental to the tourism industry.”

“But,” he said, “we should take heed on some of the recommendations that the community has, and maybe, we should continue to find new sources of revenue and or improve the economy in such a manner that we can follow the momentum of…the developments these new projects have in store for us.”

Inos did not specify further on this provision. Officials and reporters wanted to know if MVA earmark cuts stayed or were line-item vetoed. Various officials and lawmakers initially understood Inos to mean that the MVA provision was vetoed, and the MVA money left untouched.

In an interview, Inos clarified that the provision was left in the bill but “with comment.”

Inos emphasized these kind of provisions should provide a clear “nexus” on the use of funds between the program that is modified and the agency or program receiving the funds.

The $2.5 million from the CNMI’s tourism body goes to the following: $1,802,403 for Department of Public Work streetlights, $200,000 for stationary x-ray machine for the Saipan airport; $225,000 for a container and loose cargo x-ray machine for the seaport; $75,000 for a handheld x-ray scanner for the seaport; and $200,000 for the Mayor of Saipan for cleanup and beautification projects.

Inos said this provision—which in earlier drafts were amendments to the earmark statute—could open a “whole new Pandora’s box.”

The compromise version instead cited the Legislature’s authority in mandating modifications to government corporations. The MVA is listed under this provision in the budget law.

“If they can do a $2 million re-direction of funds this year, can they do a three or five million dollars next year?” Inos asked. “…We are saying this should be done very discreetly. The original intent of the tourism and promotion fund was to enhance the tourism industry, to get out in the market and try to get more visitors.”

“So as long as there is a nexus, and in such a manner that it benefits MVA” and the “receiving beneficiary’s” contribution to the tourism industry, Inos said, the Executive Branch believes that the citation of the bill on the use of the MVA funds “may be acceptable.”

“But again, it can’t be like that every year—year after year after year,” Inos emphasized.

‘Problematic provisions’

Among several others, Inos line-item vetoed provisions to fund a “drug court,” provisions that gave 100 percent reprogramming authority to the Judiciary and mayors, and a “salary cap exemption” that would allow raises for department heads on Rota and Tinian.

“There is no authorization for the drug court as a program to be able to receive any kind of appropriations,” Inos said. “We understand that there is currently a bill in the Legislature. …We urge the Legislature to enact that bill and then fund it, and make the program viable.”

Inos added that the CNMI Attorney General’s advice is that the drug court provision be vetoed “because it is contrary to the Constitution that says that appropriations are for programs that have already been authorized.”

For salary cap exemptions, Inos said salary increases are provided for certain positions and that it was “high time that they sit back and revisit salary compensation for every employee” in government.

“This method of providing salary increases to certain provisions on an ad-hoc basis, especially in an appropriations bill, which has a life of only one fiscal year, is not good policy, “ Inos said,

Inos was referring to the House and Senate “compromise” provisions that mandated $62,000 annual salary for the special assistant for the Office of Management and Budget, from $54,000; a 5-percent increase for all law enforcement officers; $45,000 for resident department heads for Rota and Tinian, from an annual pay of $36,000; and $45,000 for the deputy commissioners for Rota and Tinian.

“I urge the members to work together with everyone. If we need to re-commission a salary working group…to really study [the issue] because we know not only the law enforcement folks need the salary increases—just about everyone needs it. There is no justification for not allowing those other employees, especially in the lower echelon not receive any additional compensation.”

The salary increases were a compromise provision in the recent and contentious budget talks between the chambers of the Legislature.

“He’s right,” House Speaker Joseph Deleon Guerrero said of Inos’ wish that compensation be revisited. “We need to revisit it and update it. The pay scale has been in place long before I came in. There has been a freeze…so nothing has happened since then. The governor is saying we need to revisit that and make it up to date” as cost of living has gone up.

For his part, Deleon Guerrero said he was “relieved” that they avoided a government shutdown and that the delivery of public service would continue.

“But the process is not over,” he said. “Now that the message is going to be sent to the presiding officers of the House and Senate, then there is still a last step to this. What is the House and Senate going to do? Are they going to override it or not? And I can’t answer that ’til we look at the budget. The Senate may want to do something, the House may want to… At this point, it’s premature to say…”