FY06 projection down to $198M

Exercising his unrestricted reprogramming authority, Gov. Benigno R. Fitial has adjusted the budget of most government agencies to reflect a revised revenue estimate of $198.5 million.

According to Fitial, the Department of Finance has advised of a change in revenue projection for fiscal year 2006, reducing it to $198.505 million from the $213.635 million authorized by the last enacted budget law.

In view of this, the Office of Management and Budget will be implementing necessary allotment changes for the second quarter of FY2006.

On top of the budget cuts resulting from the reduced revenue estimate, government agencies will face a prorated decrease in funding to ensure that the Commonwealth Utilities Corp. has the $24.4 million needed for fuel purchases for the remainder of the fiscal year.

FY2006 ends on Sept. 30, 2006.

However, Fitial reiterated that essential services would be spared from the budget cuts.

“I am fully cognizant of the adverse consequences of this action and will request for your support that health, welfare, and education services continue without interruption to the CNMI. The health, welfare, and education services cannot and will not be sacrificed despite our adverse financial condition,” Fitial told Senate President Joseph M. Mendiola and House Speaker Benigno R. Fitial.

The revised allocation prepared by OMB will effectively supersede Public Law 13-24, which the government has been following in the absence of a current budget law.

Fitial maintained that his administration would continue to push for the enactment of a budget law for the remaining period of FY2006 and for FY2007.

“I expect to forward a proposed amended budget for FY2006 in the next 30 days. Our Financial Management Committee is also expected to advise us of recommendations to cope with this fiscal adversity,” Fitial said.

The committee, tasked to immediately develop a budget for FY2006, is composed of acting Finance Secretary Eloy S. Inos, acting Commerce Secretary Clarence Tenorio, the governor’s special assistant for management and budget Antonio Muna, Senate Fiscal Affairs Committee chair Felix Mendiola, and House Ways and Means Committee chair Crispin Ogo.

The Legislature, whose primary role is to appropriate public funds, among other things, gave the governor unlimited reprogramming authority last week.

This authority covers funds appropriated to all public corporations, autonomous agencies, and other entities of the CNMI government.

“The Legislature finds that it is financially imperative that the new administration be authorized reprogramming authority over and beyond the provisions of 1 CMC 7402 in order to avoid fiscal crisis and deficit spending. The purpose of this act is to assist the new administration with prioritizing needs until a comprehensive budget for FY2006 is enacted,” read a portion of Public Law 15-1.