Governor calls for ‘realistic’ budgets

Gov. Pedro P. Tenorio yesterday prodded department and activity heads to come up with a realistic budget for Fiscal 2000, taking into consideration the financial woes confronting the Commonwealth.

The governor said a memorandum has been issued by the Office of Budget and Management instructing government agencies to submit a lean budget for next fiscal year as the administration prepares the spending plan it will submit to the Legislature for approval.

“We’re still experiencing a continues reduction in revenues,” Tenorio said in an interview, “I hope the departments will submit a more realistic budget because of our situation.”

The continuous drop in cash collections has forced the governor to adjust downward the budget level for FY 1999 to $216 million, or a 13.4 percent reduction.

But his financial advisers have warned the current fiscal year’s appropriation may have to be further prune down because of the projected decline in user fees that will come from garment exports.

Garment manufacturers say production is expected to slow down 25 percent as a result of the $1 billion class action lawsuit filed against apparel makers and US buyers for alleged sweatshop conditions in factories.

According to industry leaders, because of the reduction in orders from mainland retailers they may also implement a cutback in the number of garment workers, a plan that will also reduce revenues from salary and wages.

The decline in the half-a-billion-dollar tourism industry since late 1997 has substantially pulled down revenue collections, which peaked at $248 million during that fiscal year.

In FY 1998, the government recorded general fund revenues at $233 million, a decrease reflected by the significant drop in visitor entries to 1993 level. Airline landings during that period declined 36 percent to 27,135 from 45,457 the previous fiscal year, while hotel occupancy saw a dramatic fall from a high of 85.5 percent in 1997 to 58 percent.

To cope with shrinking cash, Tenorio also asked government agencies to follow the footsteps of the Commonwealth Ports Authority, which recently has approved a 10 percent cut in total salary expenses to be implemented starting April.

He said he will be meeting with his finance advisers in order to assess the financial condition of the government.