House passes $212M budget

After a series of meetings between the leadership of both houses of the Legislature and Executive Department, the House of Representatives finally passed yesterday the proposed Fiscal Year 2005 budget of $212.65 million—approximately $1.3 million less than the previous fiscal year’s budget.

The passage of the bill at the lower chamber comes six days late, with fiscal year 2005 having already started on Oct. 1. With the bill still going through the legislative process, the government is now operating on continuing resolution, which means that its spending level remains at $213.95 million, based on the last approved budget.

Under the proposed FY 2005 budget, only some $210.52 million would be available for operations and activities of the CNMI government, with over $2.12 million earmarked for reduction of the budget deficit.

The House adopted the proposed fiscal year budget based on identified budgetary resources outlined in House Concurrent Resolution 14-1, which the chamber adopted sometime last month.

House Bill 14-250, also known as the Appropriations and Budget Authority Act of 2005, now goes to the Senate for consideration. The measure is expected to undergo major amendments in the upper chamber, with Senate President Joaquin Adriano earlier pushing for a higher fiscal year budget of approximately $215 million.

The Senate has yet to amend House Concurrent Resolution 14-1 to reflect budgetary resources of close to $215 million. Once it makes such amendments, the measure would be tossed back to the House for possible concurrence.

The Babauta administration and the Senate leadership earlier said the recent passage of the tax amnesty bill would increase budgetary resources for the fiscal year by at least $2.1 million. This prompted the leadership of both chambers and Babauta to agree to raise the amount of approved budgetary resources for the next fiscal year accordingly, Adriano said.

Before the session began yesterday afternoon, House Speaker Benigno Fitial said the chamber would act on the bill, following several days of meeting among the Senate leadership and Gov. Juan N. Babauta.

House Ways and Means committee chair Norman Palacios introduced the bill during the session. It went through several minor amendments before being passed in the late afternoon.

House minority leader Heinz Hofschneider said the lower house unanimously approved the $212.65 million budget, which he described as “more realistic.” House Vice Speaker Timothy Villagomez and Reps. Arnold Palacios and Ray Yumul were absent.

Hofschneider said that, although the tax amnesty measure and other revenue-generating proposals might achieve the projected revenue by the administration, House members have unanimously agreed “not to entertain” the governor’s integrated fiscal plan.

HCR 14-1 earlier adopted by the House deducted over $13.69 million from the governor’s proposed $226 million budget, the bulk of which would have come from the administration’s integrated fiscal plan.

The plan aimed to raise an additional $10 million for the next fiscal year by increasing nonresident workers fee, which was projected to add $3.1 million to the revenue; driver’s license and vehicle fee, $1.09 million; and hotel occupancy tax, $598,692. The plan proposed to reduce income tax rebate by 10 percent, which was projected to raise an additional revenue of $3.42 million.

HB 14-250 seeks to suspend during the fiscal year earmarking provisions provided for by several statutes, including income generated from user’s fees. One statute provides that “no less then 5 percent of the amount of user’s fees collected shall be reserved for use by the Division of Customs Services without further appropriation.”

The budget measure seeks to suspend earmarking of funds for certain purposes under Public Laws 11-25, 10-01, 10-66 and 13-37, proposing that the respective revenues be transferred to the general fund.

“The Secretary of Finance shall monitor the expenditure of funds for personnel expenses and shall not approve any payment to be made from funds appropriated under this Act that would cause the Commonwealth government to exceed the $166,647,104 appropriated under this Act,” the measure states.

The measure seeks to allot over $16.93 million for personnel and nonpersonnel expenses of the offices, programs and activities of the Office of the Governor.

The proposed appropriation for the Judicial Branch is over $4.93 million, while that for the Legislature is over $8.97 million. The measure seeks to allot over $1.34 million to the Office of the Resident Representative.

The Department of Public Health would get over $38.42 million if the proposed budget bill becomes law. This is an increase on the current level of $31 million.

The bill also seeks to allot over $38.04 for the Public School System, $12.29 million for the Department of Public Safety, $2.55 million for the new Department of Corrections, and $7.55 million for the Department of Public Works.

Proposed appropriations for the first and second senatorial districts reach $13.55 million, while that for the Saipan senatorial district is over $3.038 million.