Gov’t to submit $210-M budget

The Babauta administration is expected to submit today a $210-million spending plan for Fiscal Year 2003, just in time to beat the May 1 deadline for the budget submission.

According to acting Governor Diego T. Benavente, he met yesterday afternoon with the Governor’s legal counsel, Pamela Brown, the different mayors, as well as other Cabinet officials, to finalize the administration’s draft spending package, which he will be sending over to the Legislature today for action.

“Even though, as I understand it, there is frustration because of the continued request for sacrifices, we will be submitting to the Legislature a proposed 2003 budget, amounting to $210 million,” Benavente said.

The Lt. Governor is in an acting capacity as Governor at the moment as Gov. Juan N. Babauta is in South Korea on a tourism promotion business.

Although $210 million represents an 8.76-percent increase when compared to the $193.36-million level for this fiscal year 2002, this is still nearly $10 million below the actual revenue collections in Fiscal Year 2001.

Benavente declined to comment on the specifics of the 2003 budget proposal, particularly on the allocation of funds, saying, “I really don’t have those figures right now. I think acting budget officer Jack [Blanco] can probably answer that question better.”

The Saipan Tribune tried to solicit some details of the budget from Blanco but was referred to Senior Policy Adviser Robert J. Schwalbach, who, in turn, was at a meeting.

“We’re going to beat the deadline anyway, as we are going to submit the budget [today],” Benavente said.

Ina prior interview, acting Finance Secretary Frank B. Villanueva said the government projects the total available resources for Fiscal Year 2003 at $216.68 million. However, only $210.8 million would be available for general appropriation since over $5.87 million would go toward paying off the government’s Capital Improvement Program bond obligations.

“Of the total estimated resources [$216.98 million], $2 million is reserved by Public Law 11-14 to pay obligations related to the Public School System CIP financing bonds and $3.87 million is reserved by Public Law 11-102 to pay obligations relating to the $60-million Commonwealth Development Authority CIP financing bonds,” Villanueva had said.

The submission of next fiscal year’s spending plan comes amid spending cuts and cutbacks in the third and fourth quarter allotments across all government agencies due to the sluggish economy and the minimal growth in tourism in the last few months.

The cutbacks in allotments, in particular, has provoked a firestorm of reactions, ranging from questions on the Governor’s authority to implement the cuts across all branches, agencies and departments of the government, to discrepancies in the cuts themselves.

In the case of the Governor’s legal authority to implement the cuts, the Attorney General’s Office had come out with a concurring opinion, ruling that Babauta has, indeed, the authority to do so, as long as the cuts are proportionate across all branches, departments and agencies.

As for the cuts themselves, the Governor had earlier issued a directive saying the cuts would be 8.02 percent of each branch, agency or instrumentality’s allotted share for the quarter, except for the Public School System, which would be spared. With the AGO’s ruling, though, the Governor was directed to implement a proportionate cut, which would lower the percentage of the cuts to 6 percent across all branches and government agencies.

It was learned, however, from House Speaker Heinz S. Hofschneider that the Legislature actually got a 16 percent cut in its third and fourth quarter allotments, provoking confusion on how much the cuts really were.

Although Hofschneider himself will be desisting from arguing the matter with the administration, other lawmakers, particularly Rep. Herman Palacios, had said that he would take the matter to court by submitting a legal question to the CNMI Supreme Court to clarify the extent of the Governor’s power over the budget as it applies to other branches of the government.

Benavente said yesterday, however, that he and the Governor are willing to work it out with the lawmakers to get an understanding on exactly what is going on with the budget cuts.

“We’ve always been willing to work with the Legislature—the House as well as the Senate—to assist them wherever possible,” Benavente said.