PSS expects to be in the red if…

The CNMI Public School System expects a budget shortfall before the school year ends if it doesn’t get the additional $3.7 million that was promised it and has yet to be collected from the Casino Gross Revenue Tax.

PSS received $36.5 million in the fiscal year 2018 budget. This is aside from a combined $12.35 million in additional money allocated to it with the CNMI State Board of Education. The money was part of the $24 million appropriated under Public Law 20-42 from the CGRT.

Rep. Angel A. Demapan (R-Saipan), who is also the House Ways and Means Committee chairman, introduced P.L. 20-42, formerly House Bill 20-147 HS1 HD1, and it was signed into law by Gov. Ralph DLG Torres early this year.

Out of the $12.35 million from the CGRT, PSS got $11.85 million while the CNMI State Board of Education was allocated $150,000.

Saipan Tribune learned that PSS requested an additional $15 million from the Legislature, but was only given $12.35 million, together with the BOE. They were promised an additional $3.7 million, which is expected to come from the second wave of CGRT funds.

The expected budget shortfall is based on the report presented by PSS Finance and Budget director Christopher Ching in yesterday’s BOE board meeting at the BOE conference room on Capital Hill.

Interim education commissioner Glenn P. Muña told Saipan Tribune that the figures they presented were the actual cash that they have in the bank. Around 81 percent of the money was spent on personnel cost.

“When we presented, I want to show the actual cash. Right now, if we don’t get the additional $3 million, then we are projecting a shortfall. So, we’re looking at ways to cut just in case we need to cut,” said Muña. “What we did is we went aggressive in the Central Office. In terms of operational budget, we cut big time. And for the schools, we haven’t cut anything yet. We want to make sure we get all the resources to the schools because that is where a lot of business happens.”

One way that they are doing in saving cost is on the utilities. Muña asked all school principals to turn off air-conditioning units if their students are outside during break time or are on their way home.

“That’s where we realized a significant amount in savings. All that savings will continue to add on to reduce the projected shortfall,” Muña said.

He said that there’s no word yet when are they going to receive the money. “[But] what we did is submit a joint letter, BOE chair [MaryLou S. Ada] and me, addressed to the…House and Senate.”

Demapan, being the Ways and Means committee chairman, heads the House panel while Senate Fiscal Affairs committee chair Sen. Jude U. Hofschneider (R-Tinian) leads the Senate side.

Personnel costs

Muña said adjusting the salaries of several personnel was why a huge chunk of their budget was spent to personnel costs. “It’s different this time because of the compensation plan the board approved, effective on Oct. 1 [2017].”

“When we were preparing the budget for [FY 2018], we did budget [a certain amount for personnel]. But of course, there are a lot of teachers that have also met their certification requirements and a lot have also furthered their education.”

Preparations for the fiscal year 2018 budget began as early as February last year. Gov. Ralph DLG Torres signed the 2018 budget in September last year.

Muna added that they factored in the need to bump up the salaries of at least 25 of their personnel. “The biggest portion of our budget, for many years, is for personnel and the remaining funds goes to operations.”

“The board is not saying that we need to make cuts but what they want us to do is to review and see what we can come up with. Whether to revisit the distribution [of money] or, if needed, re-assign people to other schools to cover. We’re looking at what we can do and we’re not going to cut personnel.”

Muña said the $3 million promised them is still pending. “That’s what we’re waiting for. We will be able to end on the positive side if we get that money.”

BOE vice chair Janice Marie A. Tenorio said that PSS would have a budget deficit if they won’t get the $3 million. “PSS will incur a deficit if the government would not proceed with the second supplemental budget. It is essential that we continue our collaboration and partnership with government and Legislature.”

$12M was acceptable

Demapan, in an email to the Saipan Tribune, said there was an assurance that the $12.35 million appropriated was a figure that was acceptable, while the government collects further anticipated supplemental budget revenues from the CGRT.

“That was the basis for the Legislature agreeing to appropriate 50 percent of the supplemental revenues in P.L. 20-42 to PSS. We are aware that there are still revenues collected from the CGRT that are currently being reviewed and audited before Gov. Torres can identify the revenues available for appropriation.”

Demapan added that it has only been a little over two months since H.B. 20-147 became P.L. 20-42 that appropriated the $12.35 million. “This is $12 million in addition to the FY 2018 budget appropriation of $36.5 million, totaling $48.5 million.”

“It’s hard to imagine that with still five months remaining in the fiscal year, [PSS] is already projecting to be in the red.”

He said that they are trying to address areas of concern in the CNMI. “This is where we are at in the process. We are also mindful that there are other critical obligations of the government. Areas such as healthcare, law enforcement, land compensation, and judgments against the government.”

“As such, I will be requesting from PSS an updated breakdown relative to their request for an additional $3 million so that the committee will have the information needed for consideration in future revenues that become available for appropriation.”