House OKs bill to address gov’t’s financial deficit

The House of Representatives unanimously passed yesterday a bill that members believe will address the CNMI government’s financial deficit.

All 17 House members present at a special House session voted “yes” to pass House Bill 23-56 that seeks to use the remaining 60% of the total of indirect cost revenue or reimbursement by fiscal year collected for each grant.

The bill now goes to the Senate for action.

Reps. Edwin K. Propst (D-Saipan), Diego Vincent F. Camacho (D-Saipan), and Julie Marie Atalig Ogo (Ind-Rota) were absent but excused from the session.

Rep. Blas Jonathan T. Attao (Ind-Saipan) formally introduced the bill yesterday. Several other House members co-sponsored the legislation.

Before voting on a motion to pass the bill, Attao thanked House members for allowing the legislation to be placed on the bill calendar for action.

Attao said that, as they all know, the CNMI is facing a lot of financial challenges and if they don’t start addressing those financial challenges or deficits, it will just continue to increase over the next couple of years.

He said when the Office of Grants Management was first created in the 19th Legislature, they were able to obtain additional funds for the CNMI.

Blas Jonathan T. Attao

“Unfortunately, what we didn’t realize back then was only 40% of those monies were being used. The other 60%…was never remitted to the Legislature for appropriation purposes,” Attao said.

Therefore, the intent of House Bill 23-56 is to make sure that those funds will address financial deficits, he said.

“The more grants we get, the quicker we pay off these deficits that we we’ve been inheriting over the last couple of years,” Attao said.

Should they ever exhaust the financial deficit, future House members can revisit this statute and will be able to address other pressing needs that they will be facing in the future, he added.

In response to a question by Rep. Patrick San Nicolas (R-Tinian), Attao said the bill does not touch the CNMI budget whatsoever.

“This one will not touch any of our general fund or any local funds for that matter, but will be using indirect costs to address the financial obligations,” he said.

Attao stated in the legislation that indirect cost reimbursements from grants provide a source of money for paying down the CNMI’s budget deficit.

He said 40% of those funds currently are directed to the Office of Grants Management. Attao said the remaining 60% is not currently directed for any specific program.

He said the purpose of the legislation is to direct the remaining percentage of the total of the annual direct cost revenue or reimbursement from each grant to address the financial deficit.

Under the legislation, the remaining 50% of the total direct cost revenue or reimbursement by fiscal year shall be deposited into a special account separated from the general fund and shall be utilized for the sole purpose of reducing the government’s financial deficit.

Such funds shall be without fiscal year limitation and under the expenditure authority of the Finance secretary.

Rep. Vincent Aldan (Ind-Saipan) said a lot of people don’t understand the significance of this bill.

“This bill would literally help reduce the deficit. Right now our deficit is over $100 million. Our Gross Domestic Product if you compare that we’re upside down. We are over 100% flipped upside down. We’re technically broke,” Aldan said. “It will help reduce the deficit that our children will not have to bear the costs.”