House approves $218M budget resolution

With two “no” votes and 12 “yes,” the House of Representatives accepted yesterday the Senate-amended House concurrent resolution that sets the budget for fiscal year 2005 at $218 million.

Voting against the bill were minority bloc Reps. Heinz S. Hofschneider and David Apatang, who both expressed doubts over the administration’s ability to collect additional revenues during the current fiscal year.

The House earlier unanimously approved a $212.7-million budget for FY 2005 but the Senate amended and raised it to $217.7 million following the submission by the Babauta administration of an additional $5.1 million in projected revenues.

These new revenues are expected to come from two newly enacted laws: the tax amnesty, which is expected to generate at least $2.1 million; and the tax enhancement law, projected to yield $3 million to $6 million.

Hofschneider described the administration’s $5.1 million projection as “highly speculative” and “not a conservative figure.”

“You should not be over-optimistic. If the government is collecting additional revenues why do we still owe the Retirement Fund and the Commonwealth Utilities Corp.? Logic dictates…that to collect $218 million is far-fetched,” he said.

Further, Hofschneider questioned the reduction of the budget allocation for deficit retirement by 1 percent.

Both the House and the Senate approved to allocate only 1 percent of the annual budget to retire the government’s cumulative deficit, which is estimated to have already reached $80 million. This is reportedly on top of the government’s debts with other agencies such as the Retirement Fund and the CUC.

The 1 percent allocation results in a little over $2 million for deficit payment instead of $4 million. The government used to set aside 2 percent for this purpose.

Prior to the voting, Apatang moved to defer action on the resolution by referring it back to the House Ways and Means Committee. He also demanded for a breakdown of figures and a presentation from the Department of Finance.

House Speaker Benigno R. Fitial said that the $5.1 million is actually based on the projection by the Revenue and Taxation Division of the Department of Finance.

He said that the tax enhancement bill projection of $3 million is “conservative.”

“Revenue and Taxation people came up with this ‘speculation’ or estimate that conservatively, that measure will produce $3 million to $6 million. What the administration did was to take $3 million. So this figure plus the $2.1 million [from the] amnesty law is $5.1 million,” said Fitial.

Fitial further noted that when the House voted on the $213 million level, it did not consider these two measures.

Rep. Jesus Attao said the administration should have adjusted its total budget request from the original $226 million to $231 million in consideration of the additional revenues.

Rep. Arnold Palacios, who voted yes, said he, too, has some reservations over the administration’s ability to collect additional revenues.

Fitial noted, though, that accepting the Senate-revised resolution does not mean agreeing to the budget per se.

“Why don’t we just accept this, then we make sure our concerns are addressed in the conference committee? We don’t need to agree. Let’s not be bogged down by statistics. Resources are nothing but estimates,” he said.

Those who voted yes to the resolution were Reps. Attao, Joseph Deleon Guerrero, Jesus Lizama, Clyde Norita, Janet Maratita, Crispin Ogo, Arnold Palacios with reservations, Justo Quitugua, Benjamin Seman, Ray Tebuteb, Timothy Villagomez, and Fitial.

Reps. Martin Ada and Oscar Babauta were absent.