AGO: Budget cuts have to apply to all

The long and short of it is that, yes, the Governor has the authority to cut the budgetary allotments of other branches of government. However, such cuts have to be proportionately applied to all branches, departments and agencies.

Thus ruled the Attorney General’s Office yesterday on the question whether the Governor has the constitutional authority to cut the third and fourth quarter allotments of the Executive, Legislature, Judiciary, and all other governmental agencies.

However, Attorney General Robert Torres pointed out that the Planning and Budget Act of 1983 stipulates that the Governor’s authority to reduce allotments requires such cuts to be proportionate.

“In other words, it [budget cut] has to apply to everyone and the Governor cannot discriminate between branches, instrumentalities and autonomous agencies,” he said.

In line with this, Lt. Gov. Diego T. Benavente said the Babauta administration would correct its earlier decision to exempt the Public School System from the budget cuts, which would result in a lower 6.57-percent cut across all government branches and agencies.

The administration’s previous position—cutting everyone’s budgetary allotments except for the PSS—would have forced all the other agencies to absorb a higher reduction of 8.02 percent.

“We have, in fact, shown that the Governor does have the authority to cut even the budget of the Legislative and the Judicial Branches. It’s also clear to us that the cuts have to be done proportionately and I would agree that, if we are to cut proportionately, the cuts on all agencies and branches would probably be lesser. I believe that we will have to correct that by giving back the cuts that were made to those agencies and other branch of the government,” Benavente said.

The Lt. Governor appealed, however, to the Legislature and the Judiciary that, despite the AGO’s ruling on the matter, they support Gov. Juan N. Babauta’s position that the Public School System should be spared from the budget cuts.

“I hope that they will see it fit to reprogram the money back from whatever they will get from the cuts being made on the PSS budget, so that PSS may be able to continue at this present level,” Benavente said. “I hope they also see the importance of sparing the PSS from the cuts. Basically, I am offering them a challenge.”

It was Benavente, in his capacity as acting Governor, who issued a March 6 memorandum informing the Legislature that he will direct the Office of Management and Budget to implement the proportionate reduction in the budgetary allotments, except for the PSS. At that time, Babauta was in Washington D.C.

CNMI Supreme Court Chief Justice Miguel S. Demapan had complained to Babauta about the judiciary’s budget cut, pointing out that, not only did they get a higher cut of 8.4 percent—as opposed to the 8.02 percent cut among other branches and agencies—but that the cuts themselves represent an unlawful intrusion into the affairs of the third branch and a violation of the separation of powers doctrine.

Demapan did concede, however, that, in recognition of the dire financial straits facing the CNMI, the judiciary would be happy with a 6.5-percent cut, which would be the judiciary’s proportional share of the total projected reduction.

In its 11-page ruling, the AGO cited Public Law 3-68, the Planning and Budget Act of 1983, particularly Section 7204, which says that “decreases in estimated revenues may be absorbed proportionately by all branches, offices, departments and agencies of the Commonwealth.”

Torres said that Section 7604 (e) of the same law also provides that in the case of a $200,000 or 3-percent decrease in revenues, the reduction shall be offset against the reserve, or shall be dealt with by the Governor in accordance with procedures, if the Governor deems such action necessary to prevent a deficit budget for the fiscal year.

“[The Governor’s] authority to reduce budgetary allotment is derived from the Planning and Budget Act, 1 CMC Section 7604 and 7204. That statute plainly states that the allotment reductions apply to all branches, offices, departments, agencies, and instrumentalities of the Commonwealth, which are subject to appropriations. By using broad and inclusive language…the legislature was indicating that [the Governor’s] authority to reduce budgetary allotments is not limited to merely executive branch agencies but also to the other two branches of the government,” Torres said.