Reyes prefers shortened working time over pay cuts

The chairman of the powerful House Ways and Means Committee yesterday cautioned the administration against a proposal to cut salary of the 5,000-strong government work force because of its potential impact on personal expenses.

Rep. Karl T. Reyes said government payroll should be pared down only through reduction of work hours of its personnel where substantial savings can be made to meet shortfall in the fiscal budget estimated to reach at least $32.5 million by September next year.

About 75 percent of the 1999 spending level — equivalent to around $189 million — are allocated to pay the salary of civil service employees and those under government contract. At nearly 5,000, the government is the biggest single employer on the island.

While he is non-committal to the administration proposal, Reyes maintained there may be some legal aspects in the plan to slash between five to 10 percent the salary of each government employee in what could be a last resort to ride through the worsening financial condition of the commonwealth.

“I would rather see a reduction in the work hours to bring down the payroll obligations of the government than any pay cut,” the representative said in an interview. “In pay cut, the effect could be tremendous on those people who have existing obligations with the banks or credit institutions or those with monthly support.”

The salary reduction may also be more difficult to be implemented, delaying ongoing efforts by Gov. Pedro P. Tenorio to bring down public expenditures without disrupting government operations, according to Reyes.

“There may be some legal aspects involved in the proposed pay cut because under the personnel regulations, you have to follow the scale,” he explained, “and it will probably have to go back to the legislature to do this.”

Although they have assured the proposal is a last resort to be taken only if the situation gets worst, administration officials are cautiously looking into the plan so as not to ruffle morale of government personnel.

Last week, Tenorio presented to members of the legislature several proposals aimed at tightening fiscal spending, including pay cut as well as reduction of work hours.

Reyes, who arrived over the weekend from a personal trip abroad, met with the governor yesterday, but declined to give details of the meeting.

He said, however, that the Tenorio administration would have to undertake the new package of cost-cutting measures when specific figures of revenue estimate and budget deficit are finalized.

“The governor just wanted to say that we’ll have to see actual figures first before we start actual planning,” the legislator said. “If it come to worst scenario, we will reduce the work hours and government employment.”

Northern Marianas is reeling from its worst economic crisis in years, pulling down government revenues by as much as 13.4 percent from initial projection due to continued slowdown in business activities here.

Because of the shaky financial prospect, the government has been forced to shave $32.5 million from the $249.26 million budget approved last September.

But officials say the amount may further decline as a result of constant drop in tourism revenues and the year-long financial turmoil in Asia, NMI’s main source of tourists and investments.