$118M budget for FY05 OK’d

Both chambers of the Legislature finally agreed to endorse a $218 million funding level for fiscal year 2005, highlighted by a $4.1 million appropriation for salary adjustment of government employees.

The FY05 budget also guarantees a total of about $40 million for the Public School System.

House budget conference committee chair Rep. Oscar Babauta said the panel approved a $38.2 million budget for PSS but it inserted a provision in the bill specifying that PSS would also receive the revenues out of the $50 labor fee increase for nonresident workers. This is estimated to generate at least $1.5 million.

The appropriation bill, which is now up for the governor’s signature, provides that the Finance secretary “shall reserve…$50 of the fee collected per applicant…and reserved funds are hereby appropriated for the operations of all public schools within PSS.”

“So we are meeting the governor’s request for PSS. PSS’ budget would be $40 million or a little over $40 million,” said Rep. Babauta.

Gov. Juan N. Babauta earlier said that he would veto any budget bill that does not raise the funding level of the PSS. He said he would only approve it if the amount is anything closer to the original request of $42 million.

The House earlier approved nearly $38 million for PSS and the Senate further reduced it to some $36 million.

Under the continuing resolution, the PSS receives $37.2 million.

Meantime, the House of Representatives unanimously passed in yesterday’s session the budget bill, House Bill 14-250, which appropriates $217.75 million for the government’s spending in FY05.

The Senate, which also held its session yesterday, immediately passed the bill, 6-2, with senators Thomas Villagomez and Pete P. Reyes voting “no.”

The two Saipan senators said they could not vote on a bill that they have not reviewed at length.

“I don’t know the details of the changes made. In fact, the budget was not really done. They’re still amending it on the floor,” said Villagomez.

“I asked for an extra time to review the bill but it was put on vote right away. I can’t support it,” said Reyes.

Meantime, the budget conference committee, which was co-chaired by Sen. Joseph Mendiola, reported that of the $4.1 million allotted budget for salary adjustment, $2.2 million shall be used to pay within-grade-increase of qualified government employees or those civil service-covered employees, $1 million for frozen steps personnel under Public Law 10-76, and $942,522 for the retroactive payment of Rota and Tinian government personnel pursuant to P.L. 7-31.

The committee said the WGI and frozen step personnel “shall be paid an equal pro-rated percentage amount from each category.”

In an interview, Rep. Babauta admitted that the salary adjustment is not enough to cover all the money owed government personnel, which he said, amounts to some $6 million. But he said that whatever is left would be paid using the lapsed funds in a quarterly basis.

“We’re hoping that by end of the fiscal year [Sept. 2005], all salary adjustment is settled,” said Babauta.

Chapter 12 of the bill provides that “30 percent of all lapsed funds at the end of every quarter shall be reserved for payment of the civil service employee WGI, frozen step bonus that were affected by the austerity measures retroactive to FY 2001.”

The bill further said that “40 percent of all lapsed funds at the end of every quarter shall be reserved to reimburse the Third senatorial district delegation $9 million of the local funds used to pay the retroactive adjustment.

If the 40 percent lapsed funds would not be sufficient to reimburse $9 million in FY 2005, the application of 40 percent lapsed funds shall continue until the full amount is covered, it said.

Both houses held back-to-back sessions yesterday primarily to pass the 2005 budget.

The Legislature’s action came about eight months after the administration submitted its proposed budget of $226 million

In September, the House approved only $212.7 million budget for FY05, rejecting the administration’s $13- million Integrated Fiscal Plan.

The Senate raised the funding level to $217.7 million after getting a $5.1 million additional revenue projection from the administration, which the Legislature had opted to use for salary adjustment.