‘Bare bones’ budget passes Senate

The Senate passed by unanimous vote yesterday a $206 million budget proposal that would cut the appropriations of all but five agencies by 17 to 20 percent.

The senators transmitted the draft budget to the House of Representatives, along with a challenge for the Lower House to follow suit.

The bill approved by the Senate yesterday amended House Bill 14-371, which provided the Public School System a $50-million budget and left everybody else’s budget unspecified.

The Senate Committee on Fiscal Affairs, headed by Sen. Joseph Mendiola, amended the bill by creating a breakdown of the $206.5-million resources identified as available to the Commonwealth for fiscal year 2006.

The Senate version of the FY 2006 appropriation bill sets the PSS’s funding level at $48 million. It also mandates the Department of Finance to allocate to PSS the deficit reduction amounts collected from all government agencies. Mendiola estimated these amounts to reach $2 million and bring PSS’ total funding to its requested $50 million. The use of budget deficit funds for PSS needs will apply for fiscal year 2006 only.

The Senate’s budget proposal also suspends for the entire FY 2006 the earmarking provision of Public Law 13-37 and P.L. 13-38, the laws that created the Tobacco Settlement Expenditure Fund and the Tobacco Control Fund.

P.L. 13-37 distributes the Tobacco Settlement Expenditure Fund among the Department of Public Health, PSS, Office of Youth Affairs, Saipan private schools, and the offices of the Rota and Tinian mayors.

P.L. 13-38 requires that a portion of taxes on alcohol and tobacco products be reserved for funding tobacco control programs.

But according to the Senate, all the funds earmarked under these laws will go to the general fund for general appropriation, unless explicitly appropriated by the FY 2006 budget bill.

The Senate’s bill also sets a $166-million ceiling for the entire CNMI government’s personnel expenses.

The measure requires that all vacant positions for full-time employees be left unfilled for FY 2006. It also prohibits the termination of any existing employee based on the funding reduction resulting from the application or implementation of the budget bill.

Furthermore, the bill rejects the governor’s call for a $14-million appropriation for the government’s utility expenses. It maintains the utility budget at $5 million.

Mendiola said the bill would also require PSS to pay for its own utility services, amounting to about $3 million. “With a combined budget of $8 million, we should be able to pay for our utilities,” he said.

The bill does not set specific funding levels for 17 independent programs, including Karidat, Micronesian Legal Services, Council for Developmental Disabilities, Domestic Violence Intervention Center, Coastal Resources Management, and Crime Stoppers International. Rather, it provides them a lump sum budget of $465,128.

As earlier reported, the departments of Public Health and Public Safety, Northern Marianas College, and the Scholarship Office will operate under the same funding level as they have been since FY 2003.

“It’s been a long awaited budget. The House did not do its job in coming up with a comprehensive budget, so we took it upon ourselves to establish a budget for all agencies,” Mendiola said.

Floor leader Paul Manglona commended Mendiola for “taking the bold step” in drafting a comprehensive budget that reflects the CNMI’s real economic situation. He also expressed displeasure with the House.

“Chairman Mendiola should be commended because he took a blank budget and came up with a comprehensive one. The House left everything up in the air, as if somebody’s going to answer our prayer tomorrow. In good times, we take credit for passing a budget. In bad times, it takes even more responsibility to do it,” Manglona said.

For his part, Sen. Pete Reyes expressed hope that the governor would not veto the budget. “He has to understand that the economy is not darn good, it’s darn bad,” Reyes said, alluding to Babauta’s statement during his State of the Commonwealth Address.