Budget plan remains at $226.34M

Gov. Juan N. Babauta remains optimistic that the projected $226.34 million in revenue for fiscal year 2005 is realistic and has urged the Legislature to use the last three months of this fiscal year to pass the proposed spending plan for the next year.

In a letter to House Speaker Benigno R. Fitial and Senate President Joaquin G. Adriano dated July 1, Babauta reiterated the administration’s revenue projections for the next fiscal year, and stressed that the public deserves no less than the adoption of a sound fiscal plan each year.

“If we continue operations based on decisions made for FY03, as we will under another continuing resolution, we will inevitably fall farther away from the realities of the present. So let us use the remaining three months before the beginning of FY2005 to adopt a budget that will meet the needs of the public in the coming year,” said the governor.

He said the budget message of April 1, 2004 remains substantially the same, including the provisions for within-grade increases to government employees whose salaries have been frozen for three years. The Legislature had earlier requested the implementation of the increase in House Joint Resolution 14-5.

Also, Babauta said the administration is bent on its proposal to increase funding for the Public School System to meet future development demands.

“The Lt. Governor and I remain committed to working with the Legislature to adopt a responsible budget for FY2005. We set realistic expenditure levels for the core services of public health and public safety, based upon the demonstrated costs of these services,” Babauta said.

The law requires the administration to submit to the Legislature on April 1 its proposed budget for the next fiscal year. Any revisions to the budget proposal should be submitted to lawmakers no later than July 1.

In his updated report to the Legislature, Babauta said actual revenue collections from Oct. 2003 through May 2004 totaled $140.52 million, putting the government on track to meet the projected fiscal year 2004 revenue of $213.95 million.

Actual expenditures for the current fiscal year totaled $141.16 million through May 31, he added.

“Spending controls have been in place and will continue through the end of the fiscal year in order to keep expenditures within the appropriated amount of $213.73 million,” the governor said.

Babauta also said that the $209.79 million previously estimated to be available for general appropriation in FY 2005 remains the same, based on current revenue generating laws.

The passage of cost-cutting and revenue generation measures that the administration had previously submitted to the Legislature would add $13.69 million to the estimated revenues, he said.

Babauta also endorsed the suspension of the earmarking provisions of Public Law 13-37 and 13-38, the Tobacco Settlement Expenditure Fund and the Tobacco Control Fund, and the Legislature’s recent adoption of House Joint Resolution 14-20. Such suspension in FY05 is seen to yield an additional $2.86 million.

This would bring the total projected revenue to $226.34 million.

The updated budget proposal for FY2005 was submitted to the Legislature on July 1, the final day for the submission of updated appropriations proposal pursuant to 1 CMC Section 7201.