Senate budget proposal sees deep cuts

All but five government agencies will suffer a 17-percent budget cut in fiscal year 2006, according to a comprehensive budget proposal being drafted by a Senate panel.

Sen. Joseph M. Mendiola, who is chairman of the Senate Committee on Fiscal Affairs, said the group would finalize the draft budget in time for the Senate session at 10am today.

“Otherwise, we will call a recess so the committee can go back and adopt the budget and present it to the entire Senate for approval,” said Mendiola.

As earlier reported, the Senate committee adopted House Concurrent Resolution 14-3, which identified a $206.5-million budget for FY2006.

The committee would grant the Public School System its $50-million budget request. This represents a 35-percent increase from its current allocation.

The departments of Public Health and Public Safety, the Northern Marianas College, and the Scholarship Office would receive the same amount currently provided under the continuing resolution.

All other agencies will have to make do with 17 percent less funds.

“This is a steep cut for the agencies, but we cannot continue the spending level in previous years. We have to be realistic. The government is not generating enough revenues. To continue under continuing resolution is to condone deficit spending,” Mendiola said.

He also challenged the administrators to come up with a spending plan that reflects their respective agencies’ priorities.

“We understand that everybody wants a budget increase, but we must start to live within our means. We’re letting the administrators show their brilliant management skills and work on which programs they want to cut,” Mendiola added.

The government has been operating on a $213 million continuing resolution since 2003.

For FY 2006, the Babauta administration submitted a $225.8-million budget package that included revenue enhancement measures.

In its budget proposal, the administration projected to collect only $206 million in FY 2006 in view of projected reduced revenues from the garment industry. The industry is currently downsizing as a result of the worldwide lifting of trade quotas.

However, the administration said it could collect an additional $20 million if the Legislature would raise the poker license fee by $6,000 and divert all tobacco control and settlement funds and local poker funds to the General Fund.

H.C.R. 14-3 rejected the proposed revenue enhancement package and identified only $206 million for FY 2006.