House waiting for 3Q financial report

The 14th House of Representatives is waiting for the third quarter financial report of the CNMI government to determine if revenue is enough to warrant the approval of the $226 million budget proposal for fiscal year 2005.

Rep. Norman Palacios disclosed Friday that the Committee on Ways and Means could not reach a decision on the budget proposal until the complete financial report is received.

“We hope to get it [third quarter report of the Commerce Department] to see if there would be enough revenue by probably August, since most of the revenue would be coming in by this month,” said the representative.

He pointed out that due to the absence of the complete financial report of the government, the administration would continue to operate on continuing resolution.

“We can’t decide yet on the budget until we get a clearer picture. It would be continuing budget resolution until everything is finalized,” Palacios added.

The Babauta administration had submitted last April a $226-million budget proposal for the next fiscal year. In May, however, the House adopted House Concurrent Resolution 14-1 that sets the budget ceiling for FY 2005 at $190 million.

This was the decision of the House after the Finance Department reported that the CNMI government collected only $107.3 million in the first seven months of FY 2004, making it nearly impossible for the Babauta administration to justify its proposed $226-million FY 2005 budget.

In a report submitted by the Department of Finance, from October 2003 to April 30, 2004, the total collection of the government is $107.32 million, which is way below the revenue resources projected by Finance for FY2005.

The identified revenue streams include income taxes, excise tax, liquid fuel tax, beverage container tax, garment user fee, hotel occupancy, bar tax, beautification tax, licenses and fees, charges for services, nonresident workers fee fund, deportation fund local revenue, tobacco control fund, tobacco master settlement fund, and other revenues from penalties, interest income, business privilege fee, lottery revenue, and net of bond proceeds.

The report prompted the adoption of House Concurrent Resolution 14-1 that establishes the total anticipated financial resources for FY 2005 is only $190 million and that expenditures of the CNMI government for FY 2005 shall not exceed the total anticipated financial resources of $190 million.

“Subsequent bills making appropriations for FY 2005 shall not approve expenditures for the operation of Commonwealth government exceeding the total anticipated financial resources until such time that additional taxation is approved, additional revenues are received, or the governor revises his estimates to anticipate financial resources in excess of those estimated, and the Legislature recognizes the additional resources by a supplemental or amended House concurrent resolution,” Palacios said.

According to the House leadership, the governor can resubmit his budget plan if he identifies and collects supplemental budget for the fiscal year while the Saipan Legislative Delegation would continue to assist him in finding ways on how to increase the government’s revenue resources.