A somber budget hearing

It was a somber start to the budget hearings yesterday, with the Public School System first on the hot seat of the House Ways and Means Committee on Capital Hill.

PSS is asking for an operating budget of $67 million. However, based on the proposed budget submitted by Gov. Ralph DLG Torres to the Legislature, the government has only allotted it $36.7 million.

If push comes to shove, though, PSS can operate on a $51-million budget, according toEducation Commissioner Glenn Muña.

Committee chair Rep. Ivan A. Blanco (R-Saipan) described the mood of the budget hearing as somber.

Blanco told Saipan Tribune that PSS officials, led by Muña, briefed House members on its current financial situation. Associate commissioners Yvonne Pangelinan, Jackie Quitugua, and Eric Magofna and CNMI State Board of Education vice chair Herman Atalig were also present at the hearing.

“The gist of the hearing is what steps PSS has taken or is taking to stay within the shortfall. One of the hardships they are facing is there’s no constant number allotment that would allow PSS to plan for a few days or a quarter,” said Blanco.

“The commissioner had mentioned that they could spend $200,000 this month, then $500,000 the next. It is hard for them [PSS] to plan for their utilities, salaries, and other expenses. It’s good that they shared this to the committee members, so we understand their position.”

The Office of Management and Budget has implemented a 15-percent cut across all government agencies.

That has resulted in the PSS budget getting a $6.5 million reduction, plus an additional $968,000 cut seen by Legislative Bureau fiscal analyst David Demapan.

Some of the cost-cutting measures that the PSS management has already implemented are freezes in within-grade salary increases, zero hiring, cutting down on utility use (use of air conditioning units in classrooms and the central offices), suspension of all travels, and suspension of purchase orders.

“PSS had a proactive approach. Like freezing the FTEs, they were funded but they were never filled; they can’t hire, so no hiring right now. They also said that they cut the percentage of the central office budget. They [PSS] know that belt-tightening measures must be done,” said Blanco, who added that they would meet with PSS officials again once the CNMI Supreme Court issues its opinion on the certified question submitted by PSS.

PSS wants to settle the 25-percent budget share it should get each year, as mandated by the CNMI Constitution—whether that 25 percent is gross or net of the Commonwealth budget.

“We are going to sit down again with PSS and discuss whether further steps must be taken,” said Blanco. “Either, more cost-containment steps or how we can mitigate some of their cuts or where we can get the money from. What I’m hearing from the [committee] members is that they want to give what PSS needs. According to the budget now, 25 percent is $36 million.”

Rep. Tina Sablan (Ind-Saipan), two of the minority members on the committee, said she agrees with how Blanco described Muña’s statements at the hearing.

“Commissioner Muña gave us a very sobering picture of the state of PSS today, and the great lengths they are going to cut costs while continuing to provide quality services for our students,” she said. “I can understand also why it’s extremely challenging trying to plan for the rest of this fiscal year without a clear picture from Finance of how much they can expect in allotments in any given month. The administration must be more transparent about allotment decisions.”

She added that PSS, like other government units, needs immediate information on the government’s finances. “PSS [also] needs timely and accurate financial information to plan, make proper adjustments, and survive the rest of the year.”

“Looking ahead to the next fiscal year, it’s also very apparent that the governor’s proposed budget for PSS falls far short of what they need—it won’t even be enough to meet current payroll, let alone keep the lights on at our schools.”

The budget hearings continue tomorrow with Rota at 9:30am and Tinian at 1:30pm. The Judiciary and the Department of Public Safety-Saipan are scheduled at 9:30am and 1:30pm on Thursday.

Torres submitted a gross budget of $233 million for fiscal year 2020; of that amount, he projects a net budget of $147 million.