Cost-cutting measures reiterated

Gov. Juan N. Babauta has reminded CNMI government agencies to continue with their austerity measures in view of the Legislature’s failure to pass a budget for fiscal year 2005.

In a memorandum issued to all department and activity heads on Oct. 1—the first day of the new fiscal year—Babauta noted that the government will need to continue to operate under all provisions of Public Law 13-24.

P.L. 13-24 established appropriation levels for FY2003. It was the last enacted budget law.

“Because of [the lack of a new budget law], we will need to operate under continuing resolution, once again, until a budget is passed by the Legislature and approved by me,” Babauta said in the memorandum.

The governor reported that he has directed the Office of Management and Budget to issue the FY 2005’s first quarter allotments to all departments and government agencies, based on the FY 2003 “to avoid any disruption in providing essential public services.”

He reminded government officials that P.L. 13-24 maintains that the Finance secretary should reserve at least 2 percent of the total fiscal year appropriation for the purpose of retiring the government’s accumulated deficit.

This comes in addition to the 1-percent public auditor’s fee imposed on the total approved budget.

Babauta also stressed that the freeze on hiring new full-time employees remains in effect. Vacant positions may only be filled upon certification by the governor, presiding officers of the Legislature, or the chief justice, that the filling of the vacant position is essential to the delivery of public services and that there are available funds for the position.

“Operating under FY 2003 funding levels puts us in the same predicament that we’ve had to deal with in the past two fiscal years, especially with regard to the shortfalls in public health, public safety, and utilities,” Babauta said.

“With this in mind and with an emphasis on the continuation of all austerity measures in place, it should be clear that every expenditure decision made must maintain the highest level of accountability,” he said. “This level of accountability should encourage departments to aggressively adhere to expenditure controls currently in place in order to meet their needs and stay within the given budget authority.”