$20M bonanza for PSS

Gov. Juan N. Babauta has decided to commit over $20 million in Compact Impact funds entirely to the Public School System over the next four years beginning fiscal year 2005.

Babauta announced his decision during his meeting yesterday with the members of the Board of Education.

“I am willing to commit the entire $5.1 million annual Compact funds to PSS in the next four years. It’s our commitment to education,” Babauta told education officials, led by BOE chair Roman C. Benavente and deputy education commissioner David Borja.

During the meeting, which was held at the Governor’s Office conference room, governor senior policy advisor Bob Schwalbach said the move is actually risky but since economic trends in the Commonwealth look promising, “we’re taking the risk.”

“The economy is picking up. Our revenue collection based on the first two months of FY 2005 is very promising so we’re confident to take the risk,” he said.

He noted that huge capital improvement project spending in the last three years has actually boosted the local economy.

The Babauta administration earlier said that the CNMI spent over $100 million in CIP funds in the last three fiscal years—the biggest spending in CNMI history.

“That’s the reason why the economy has picked up,” Schwalbach said.

He said, though, that the federal money was pumped primarily into the construction business.

“Not much of it went to education. So I think that’s the reason why the governor is giving this substantial amount to PSS,” Schwalbach added.

Babauta, who had thought to use the Compact money as leverage to pay off the government’s debts, earlier said he would divide the grant funds among key government agencies such as PSS, Department of Public Health, Department of Public Safety, and the Northern Marianas College.

The PSS had aggressively lobbied for a share in the Compact funds, saying that its immediate needs even exceed the available annual grant of $5.1 million. In March this year, PSS submitted a revised request for Compact impact funding totaling over $7 million.

PSS said it needs $3 million for school repair and maintenance; $1 million for school buses; $600,000 for copiers; over $2 million for 31 classrooms for Kagman kindergarten to third grade students; $311,000 for the Sinapalo elementary school playground; $80,000 for a Kagman High School stage, and $50,000 for 25 computers to allow the implementation of a student information system.

Last January, PSS submitted a $5.6 million funding request to cover the educational-related costs of Freely Associated States students in the CNMI.

PSS had said that $1.8 million would be needed for personnel and operating support cost of FAS students, $2.6 million for the classroom needs of FAS students, and $1.25 million for buses.

There are currently 516 FAS students enrolled with PSS, comprising 5 percent of the total PSS population. PSS puts at $3,520 the educational cost per student.

The Compact funding of $5.1 million is the CNMI’s share in the $30 million federal appropriation to compensate territories on FAS migration-related costs.

The Compact legislation provides that $30 million will be divided each year for the next 20 years among the CNMI, Guam, Hawaii, and American Samoa to help these jurisdictions deal with the effects of migration from FSM, Palau and the Marshall Islands, which are commonly known as the freely associated states or FAS.

The funds are to be divided proportionally among the jurisdictions on the basis of the number of people in each jurisdiction who migrated from FAS after 1986, when the original Compacts went into effect.

Yesterday’s meeting was also attended by BOE members Marja Lee Taitano, Dino Jones, PSS finance director Richard Waldo, PSS federal program coordinator Tim Thornburgh as well as Finance Secretary Fermin Atalig and governor’s CIP management consultant Charles Jordan.

Education officials, who have been complaining about the lack of funds, appeared very delighted but composed, only exchanging glances with one another.

They said they would sit down again with administration officials to finalize the report to be submitted to the Department of the Interior.