$103.3M budget is now law

Gov. Ralph DLG Torres and Lt. Gov. Arnold I. Palacios pose with some members of the Executive, Legislative, and Judiciary branches after Torres signed yesterday afternoon the $103.3-million budget for fiscal year 2022. (FERDIE DE LA TORRE)

Gov. Ralph DLG. Torres signed into law yesterday afternoon the $103.3-million budget bill for the CNMI government’s operations for fiscal year 2022, averting a partial shutdown of government operations.

Combining the $103.3 million from the general fund and the $175 million allocated to the CNMI from the American Rescue Plan Act, the CNMI government will have at its disposal a total of $278.38 million for government operations in the new fiscal year.

The gross identified budgetary resources for fiscal year 2022 totaled $144,848,801. Minus debt servicing costs, this leaves the government $98,897,301 that’s available for appropriation. Adding to that the $4,487,022 budget for the Department of Public Lands, the grand total revenue available for appropriation is $103,384,323.

After signing the bill into law, Torres announced that government employees can wake up tomorrow morning knowing that there will be no shutdown, which prompted cheers and claps from members of the Executive, Legislative, and Judiciary branches who were present at the Office of the Governor’s conference room on Capital Hill.

Present at the signing were Lt. Gov. Arnold I. Palacios, Senate President Jude U. Hofschneider (R-Tinian), House of Representatives Speaker Edmund S. Villagomez (Ind-Saipan), CNMI Supreme Court Chief Justice Alexandro C. Castro, Superior Court Presiding Judge Roberto C. Naraja, some lawmakers, Cabinet members, and other government staff.

Before signing the bill into law, Torres talked about some items in the budget that he vetoed at the recommendations of Attorney General Edward Manibusan as well as Finance Secretary David DLG Atalig, and the Office Management Budget.

Torres said some of the line-item vetoes were because some of the items are already provided in the law and incorporating them again in the budget bill were unnecessary. Torres said some of the items had good intentions, but not applicable under the budget itself.

Torres said they sent the budget to the Legislature in April 1, 2021, and then amended the submission last July. Hopefully next year, Torres said, the Legislature will pass the budget bill sooner so that it will give them, along with the Office of the Attorney General, more time to review it.

“But nevertheless, we’re happy that we have a working document that we will be signing into law,” said Torres.

Torres congratulated the CNMI courts for getting around $600,000 for the Mental Health Court.

Torres signing the budget bill into Public Law 22-08 as Palacios looks on at the governor’s conference room. (FERDIE DE LA TORRE)

“That’s something that I also want to personally thank the Legislature for putting that into this as a priority. As we have seen the Drug Court as very successful and now venturing into our Mental Health, that’s something that all of us in this room understands the importance for our community,” he said.

Palacios said the line-item vetoes are mostly administrative provisions, and there is nothing major. For the most part, the budget as passed by the Legislature is basically intact in terms of the numbers, he added

The governor said he also vetoed the public auditor section that provided exemptions to some agencies from paying the mandated 1% public auditor’s fee. He said the public auditor needs that funding to do what they need to do.

“So across the board, I just line-item vetoed that part so that everybody gets to pay their 1 percent [to OPA],” he said.

About the ARPA funds, Torres said he wants to have a good working relationship with the Legislature, adding that they did give an overview on how the ARPA funds will be spent.

“Mr. Speaker, you know that I do call you and my doors are always open to you and to anybody in the House that wants to come and discuss ARPA. Same with the Senate,” he said.

He said they did send the ARPA spending plan to the U.S. Department of Treasury and that plan was approved.

“If there is any amendment to be done, rest assured that they will make this proper channel,” the governor said.

With respect to the Micronesian Legal Services, he said he line-item veto that in the general fund, but promised that he is going to help MLS instead using ARPA funds.

Torres said the $50,000 allocated to the Office of Planning Development to do the feasibility study for e-gaming was vetoed because they believe that this should be done under the Commonwealth Casino Commission because that’s the entity that does that business.

One item that he did not touch in the budget is the allocation of $25,000 for a desk audit on the CNMI government. Torres said he looks forward to that but said that Finance Secretary Atalig believes it’s going to cost a lot more than $25,000.

Another was the allocation of $50,000 for the Public School System to do an environmental assessment feasibility study for Hopwood Middle School. “That’s going to take a lot more than $50,000 but the idea there is good and that they need to do that,” Torres said.

A provision in the budget for a JD Edwards system to keep track of government funds was line-item vetoed because the government is going to use a whole new system, Torres said. “This is a whole new system. I was just briefed about it an hour ago. So I hope that we all get the patience and understanding of this new system,” he said.

Torres said the goal is to be a paperless government, where they can also look at the progress and expedite the routing of papers, whether it’s for procurement contracts or other permitting projects.

Torres said in a later interview that he started reviewing the bill over the weekend after he received it last Thursday night. He said he sat down with Atalig, the AG, and OMB and reviewed it on Tuesday. “Today was just the final touch on the final product of the bill,” he said.

Torres said there’s some good intentions in the bill, but some need to be put in separate legislations and some need clarifications.

The governor said one of the best highlights is the budget for the Mental Health Court. “We are giving them $600,000, so that’s definitely a good start…and this is something that the community is in need and I’m happy to support that fully,” he said.

“I want to again thank the Legislature, both houses, on the efforts put into it. But more so the signing of the budget today prevents the shutdown and that’s something that no administration wishes…certainly even the Legislature,” he said.

Palacios said fortunately they didn’t have to work until midnight to get the budget done and that’s a testament to both Houses, presiding officers, and chairpersons of the House Ways and Means and Senate Fiscal Affairs committees.

Palacios said there were some provisions that they did not agree with and they had to veto them at recommendations of the OAG, OMB, and Finance and he hopes they could later be worked out.

On the departmental salary increases, Palacios said the AG recommended that they go a separate route on that with a separate legislation to effectuate that particular issue.

Villagomez commended House Ways and Means chair Rep. Donald M. Manglona (Ind-Rota) and Senate Fiscal Affairs Committee chair Sen. Victor B. Hocog (R-Rota) for their work on the budget. “When we knew we were going into [committee] conference, I was keeping in touch with chairman Donald [Manglona] and, you now, thought that they’re going to give themselves at least three days at most to have a product from the conference committee. Even the community was surprised that they were able to knock it off in, what, two hours or just a little over two hours, and you know they were able to iron out their differences,” he said.

He said at the end of the day, they cannot make everybody happy but it’s all about compromise and working together, as shown with some of the line-item vetoes.

“But it’s fine,” said Villagomez, adding that it’s all about coming to the middle and coming to the table together.

Hofschneider described what the conference committee achieved on the budget as “monumental,” recalling that the “guys burn midnight oil” last year.

“I’m not surprised simply because there is just funding all over, right. It’s just really the general fund,” Hofschneider said.

He said by virtue of them blessing the package that was submitted by the administration essentially solidifies and authenticates the spending plan of the ARPA as well.

Hofschneider said he is a staunch support of the Judiciary’s efforts to kickstart the mental and behavioral court system, which is getting a lot of ground both legislatively, nationally, and now in the CNMI.

Castro said he is proud of the elected leaders of the Commonwealth.

Castro said as they sit there, he just got off CNN and Fox News that U.S. Congress is still wrestling with the budget and that they may have a shutdown as they cannot agree on a budget.

“But one thing I’m happy of my elected leaders here is we can agree and disagree today, but at the end of the day, we come together and sign this budget so that the government is open and the services provided to our people,” Castro said.

Atalig said in an interview he is very pleased as they were able to avert a government shutdown.

“I think the Legislature and administration put together a nice bill to operate our government for the next fiscal year,” Atalig said.
He said there are some areas that they still need to work with the Legislature in order to fine-tune what they and the administration want to accomplish.

The Legislature transmitted the budget bill to the desk of Torres last week, Thursday after the House adopted the final “product” of the bicameral conference committee that worked out the budget.

The Judiciary is appropriated $5.93 million from the general fund and $2.10 million from ARPA fund for total of $8.04 million. The Legislative Branch is appropriated $6.70 million from the general fund and $2.60 million from the ARPA funds, for a combined total of $9.31 million. The Executive Branch is appropriated a total of $26.58 million from the general fund and $82.62 million from ARPA funds, for a combined total of $109.20 million.

The budget plan, House Bill 22-74, HD3, SD1, Conference Committee Substitute 1, goes into the books as Public Law 22- 08.