A reminder of whose idea it was to ‘backfill’

Recently, comments made in the media have suggested that the idea to use American Rescue Plan Act funds to pay for retiree bonuses came from me. This is totally untrue. While I am 100% for the retiree bonus, we need to fund the bonuses the right way, the way that guarantees that the CNMI Office of the Attorney General does not sue retirees and that the CNMI does not jeopardize federal funding by spending ARPA illegally.

We have seen what happens when the Finance secretary pays out money improperly. There are cases for overtime pay and over-the-cap salaries. Maybe not immediately, but eventually the Office of the Attorney General sues for collection. We have seen what happens when the CNMI Retirement Fund makes miscalculations and issues overpayments. Retirees, through no fault of their own, have been forced to return years’ worth of overpayments within incredibly short time periods. This has to stop. As lawmakers, we cannot ignore the law. Retirees should not need to worry about being sued for bonuses that are paid out improperly.

I have supported legislation to fund the initial $500 bonuses using money that was appropriated to budget items vetoed by the governor. The House legislation not only created a business unit, it also funded it and identified which accounts would be tapped. When we doubled the bonuses from $500 to $1,000, the House identified the Marianas Visitors Authority because it was adequately funded both locally and federally. MVA even had the resources to provide $500 worth of “travel bucks” to tourists.

Back in December of 2021, Gov. Ralph DLG Torres sent a letter to the Legislature where he stated that he intended to fund the bonus with local operations money and that he would address this shortfall with ARPA funds. Finance Secretary David Atalig repeated this message on Feb. 15, 2022, in a meeting before the House Ways and Means Committee. Referring to the plan to use local operations money and then use ARPA to address the temporary shortfall, Secretary Atalig used the term “backfill” several times.

More recently, in a Saipan Tribune article that was published on April 5, 2022, Senate President Jude Hofschneider said the idea of funding the retiree bonus indirectly by using it to backfill our local funds “is inconsistent with federal rules as there are certain restrictions on the use of ARPA funds.”

Significantly, however, this same article claims, “[i]t was House vice speaker Blas Jonathan T. Attao (R-Saipan) who earlier said that the $850,000 they proposed to remove from MVA for the $1,000 bonuses for government retirees will be backfilled or returned to MVA through the ARPA funding.” This is totally false.

Sen. Hofschneider noted that the Senate passed Senate Joint Resolution 22-05 (“SJR 22- 05”) on Dec. 15, 2021. SJR 22-05 states, “ARPA, however, prohibits using ARPA federal funds to pay for retirement benefits.” (Page 1, lines 13-17). Significantly, however, despite acknowledging this prohibition, the SJR 22-05 also states:

WHEREAS, the Governor and the Secretary of Finance plan to reprogram the total amount of $1.3 million for the sole purpose of retiree bonuses and assured the Legislature that programs under the general fund will not be hindered in any way as these funds will be back-filled using ARPA funds under the provisions of Government Loss Revenues, which is subject to state law. (Page 2, lines 16-20).

Sen. Hofschneider also noted that the Senate passed Senate Joint Resolution 22-09 on March 10, 2022 (“SJR 22-09”). SJR 22-09 also states that: “ARPA, however, prohibits using ARPA funds to pay for state retirement benefits including any CNMI retiree bonus.” (Page 1, lines 16-217). Like the previous Senate Joint Resolution, SJR 22-09 also states that:

WHEREAS, the governor and the secretary of Finance plan to reprogram the total amount of $2.6 million from within the Executive Branch for the sole purpose of retiree bonuses and assured the Legislature that programs within the Executive Branch will not be hindered in any way as these funds will be back-filled using ARPA funds under the provisions of Government Loss Revenues, which is subject to state law. (Page 3, lines 9-13).

I never intended to use ARPA funds to directly or indirectly fund the bonus. I have always maintained that this may violate the terms of ARPA and jeopardize $500 million in federal assistance. The Senate president claims that he and the Senate are “determined to find the source of funds without jeopardizing an industry known in the CNMI for the last 40 years, and ensure the retirees get their bonus soon.”

If this was true, he should have agreed to meet the House in a conference committee. If this was true, then why leave the decision as to how to fund the retiree bonus to the governor alone? The Legislature, not the governor should decide where the money should come from. The Senate’s legislation relied on the governor and his reprogramming power but without the House appropriating funds into a new business unit, this reprogramming power is not enough. Moreover, after all the deficit spending we have seen by his administration, how is abdicating our “power of the purse” responsible? This is why the House has passed two bills to fund the retiree bonus using $2.6 million of local funds that we actually identified. This is why the House maintains that we should meet and confer.

The governor takes the credit for a lot of things. This ARPA idea is his and he knows it. Secretary Atalig has been repeating it since February. The Senate has passed not one but two Senate joint resolutions where there is express language that both warns against using ARPA and then clearly attributes the plan to use ARPA illegally to the governor and the secretary. Despite this, in an article published in the Marianas Variety on April 6, 2022, MVA board chairwoman Viola Alepuyo stated that she had asked Finance Secretary Atalig “if it is true that MVA’s budget can be ‘backfilled’ with federal ARPA funds.” The article also provides:

“The secretary said he did not know where the House of Representatives was getting that information,” Alepuyo said. ‘More importantly, the Finance secretary made it clear that he did not know where that information came from—it did not come from him. He did not think that it is legally permissible for Finance to ‘backfill’ MVA’s budget if House Bill 22-95 is approved.”

Is Secretary Atalig indicating that if it was a Senate joint resolution doing the “backfilling” it is legally permissible, but if it is a House bill it is not? If not MVA, then which account does he plan to utilize?

In closing, I just wanted to set the record straight and remind everyone of the “backfilling” that Gov. Torres and Secretary Atalig planned to do and their promise from last December. They may have forgotten that the letters, testimony, and resolutions prove that the “backfilling” was their idea, and they may have forgotten about their promise to the retirees. But when it comes to political games like this, the people will not forget.

Blas Jonathan “BJ” T. Attao (Special to the Saipan Tribune)
Rep. Blas Jonathan “BJ” T. Attao is the vice speaker of the House of Representatives in the 22nd Legislature.