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‘Budget shortfall is estimated at $14.5M’
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Posted on Mar 20 2008
The chairman of the Senate Committee of Fiscal Affairs reported that the CNMI government is facing a shortfall of more than $14 million if current spending under continuing resolution is not stopped.
In a committee report on the budget bill passed by the House of Representatives last month, committee chair Maria Frica T. Pangelinan noted that the government is on target for General Fund expenditures of almost $181 million by the end of fiscal year 2008.
This is troubling, she reported to the Senate last Wednesday, since the governor’s budget proposal identified just over $160 million as revenues available to the General Fund.
Pangelinan said that when one adds the $5 million in Compact Impact funds and $1 million from P.L. 15-31, the $20 million projected overrun will be reduced, but only slightly, to a shortfall of approximately $14.54 million.
She said this translates to an overspending of approximately $1.2 million per month under continuing resolution.
“This committee, when considering H.B. 16-51, must bear in mind how to compensate for the approximately $7 million in deficit spending already incurred during these six months (as of March 31, 2008) of operating under a continuing resolution,” the committee report read.
It added that whatever deficit is created in FY 2008, the government is bound by the Constitution to retire within two years. “It is really important that we move swiftly to avert the creation of a deficit in FY 2008,” she said in the report.
The committee report recommended that the budget bill be referred to a joint committee, which the Senate unanimously voted to adopt during its session Wednesday.
The House passed the 2008 appropriations bill on March 3. It was introduced on Feb 29 by House Way and Means chair Ray Yumul and earmarks $164.25 million for all government agencies under the General Fund and $3.23 million for the Department of Public Lands, which is funded by income from leases on public lands.
In addition, the bill distributes $5.117 million of Compact Impact funds, or reimbursement money from the federal government to the CNMI for hosting Micronesian citizens.
The budget will apply to the current fiscal year, which runs from Oct. 1, 2007 to Sept. 30, 2008.
