Teno seeks overhaul of budget law

Gov. Pedro P. Tenorio has asked lawmakers to overhaul the CNMI Planning and Budgeting Act to ensure that the government’s cash resources are spent wisely by departments and agencies amid diminishing revenue collections.

Noting that budget requests by each department or agency have consistently increased despite downward revenue projections, he said these figures do not necessarily reflect efficiency in the delivery of public services.

Finance officials had received about $75.4 million in new additional budget requests under the FY 2001 proposed spending package, but most of the appeals were rejected due to the limited resources.

According to Mr. Tenorio, the administration decided to provide the increase in appropriation for the next fiscal year to agencies that are essential to public service, such as education, public safety and public health.

He emphasized, however, that many of those asking for higher spending limit had justified those additional cash resources on the amount of the money to be spent, rather than on performance of that public office.

In order to ensure that these limited resources are maximized, the governor recommended that the Planning and Budgeting Act be amended to implement a budgeting system based on “performance and measurable results, not intentions” on how the money will be spent.

“This fundamental change in the way our resources are budgeted will require agencies to budget and report on their performance,” he said in a letter to presiding officers of the Legislature.

“This way we can identify the benefits that are to be achieved with additional resources, and reliable performance data will either support or refute claims made by agencies,” added Mr. Tenorio.

The chief executive’s request came in light of the submission of the fiscal budget proposal for 2001 amounting to over $220 million — up from the $211 million spending level for the current fiscal year.

Since the $9 million increase in the revenues have been earmarked for the Public School System as well as the Departments of Public Safety and Public Health, other agencies will have to make do with the same appropriation allocated to them in the previous year.

To accommodate their other needs, the administration even had to cut the budget of other programs or keep it at the same level as in the previous appropriation — a move that Mr. Tenorio said would result to shortfall.
These programs include medical referral, scholarships, overtime pay for police and fire officers and government utilities.

The island government has been experiencing financial strains since 1997 at the start of the Asian economic crisis when tourism revenues, the backbone of the local economy, plummeted as a result of shrinking visitor arrivals to the CNMI.

This has led to sharp fall in annual spending level of the government — a huge chunk of which are spent for personnel costs and salary of nearly 5,000 public sector employees — and consequently, a reduction in appropriation of all departments and agencies.