Further cuts for CNMI in Obama’s proposed budget

President Barack Obama’s proposed $3.8-trillion budget for fiscal year 2013 has further cuts in capital improvement project funding for the CNMI.

Obama’s proposed $575.3-million budget request to support U.S. insular areas gives $8.7 million to the CNMI for CIPs, a reduction of some $800,000 or 8.4 percent from the FY 2012 CIP funding of $9.5 million.

Annual CIP funding for the CNMI has been on a steady drop in the past few years.

In FY 2010, it was $11 million, before going down to $10 million in FY 2011, then to $9.5 million in FY 2012, and to $8.7M in FY 2013.

Keith Aughenbaugh, systems accountant at the U.S. Department of the Interior’s Office of Insular Affairs, said yesterday that the reduction in the CNMI’s CIP funding for FY 2013 is because of performance issues.

He said the CNMI’s “performance” in complying with mandates is a bit lower than those shown by other territories, resulting in a decrease in funding.

American Samoa is scheduled to receive $9.9 million in CIP funding in FY 2013, while Guam will get $6.1 million. The U.S. Virgin Islands will get $2.9 million.

The current mandatory appropriations of $27.7 million will continue to be used to undertake CIPs which the Office of Insular Affairs said “create economic opportunity in U.S. territories and improve the quality of life in those communities.”

It’s not yet known, however, whether the CNMI’s “speed of spending” previously given CIP money also caused the further decrease in the proposed funding for 2013.

House Ways and Means Committee chair Ray Basa (R-Saipan) said yesterday the CNMI getting less money for CIP could also be a result of an across-the-board or proportionate reduction in funding because of the nation’s financial problems, and not because the CNMI has been slow in spending CIP money.

“We need improvements in spending CIP money as quickly as possible. But you also have to note that although we want to start projects early, there are a lot of federal requirements to follow. You have the environment rules for reed warblers, for example, and you can’t just start your construction without complying with these federal regulations. That’s causing a delay,” he said.

Press secretary Angel Demapan said the CNMI CIP Office has yet to receive official notification of the new budget.

“Once it is received, the administration will be able to review its funding allocations to see what sources were subject to reductions,” he added.

Delegate Gregorio Kilili Sablan (Ind-MP) had said if a territory has a substantial backlog of CIP funds, Interior may withhold or redistribute that territory’s CIP money for the current fiscal year among the other eligible recipient territories.

He had said a substantial backlog is defined as spending less than 50 cents of every $1 appropriated. Sablan said the CNMI is only spending 32 cents of every $1 it gets in CIP money.

‘Tough choices’

Obama unveiled on Monday his FY 2013 budget request of $3.8 trillion that increases taxes on the rich and spends new money on infrastructure and education.

“We built this budget around the idea that our country has always done best when everyone gets a fair shot, everyone does their fair share and everyone plays by the same rules,” Obama said in his budget message.

Obama proposed a $575.3-million budget for the Interior’s Office of Insular Affairs, which has jurisdiction over insular areas such as the CNMI and Guam.

A statement from OIA said the budget request includes $88 million in current appropriations and $487.3 million in permanent and indefinite appropriations for fiscal payments mandated by law to U.S. territories and Freely Associated States.

OIA said the president’s budget reflects tough budget choices, cutting costs in order to fund the highest priority requirements, and advancing efforts to shrink federal spending while being mindful of ongoing commitments.

Interior assistant secretary for insular areas Tony Babauta said the 2013 budget request “demonstrates President Obama’s continued commitment to the well-being of the U.S. insular areas while remaining fiscally disciplined.

“The budget proposes strategic investments as we actively pursue economic development initiatives to encourage private sector development in insular areas,” he said.

The budget request includes $60.3 million for programs that will address a variety of technical assistance and facilities maintenance programs in the U.S.-affiliated island communities, including Guam, the U.S. Virgin Islands, American Samoa, and the CNMI.

It also makes noteworthy investments of $5.4 million to pursue increased employment through sustainable and renewable energy strategies, improve the quality and quantity of economic data from the territories, and to support improvements in insular area government management.