FY09 budget plan: $158.4M

Gov. Benigno R. Fitial is requesting a budget of $158.4 million for fiscal year 2009, a slight decrease from the spending limit for the past two years.

According to the governor, the 1-percent decline in the government’s resources is “an indicator that the economic worst is behind us.”

Cost-cutting measures remain necessary, the governor said in the budget proposal he submitted last Friday.

“The challenge to stay within the budget authority remains the same in FY08 and FY09. Continued due diligence in implementing strict fiscal controls and cost saving measures is a must,” he said.

Fitial asked the Legislature to approve relief measures integral to his budget submission.

An 11-percent retirement contribution rate, unpaid holidays, 12 austerity Fridays, and the continued reprogramming of lapsed funds and fund balances from various non-General Fund accounts are all factored in the governor’s budget.

Further, the governor urged lawmakers to pass a proposed revenue bill that would double the fees for driver’s license, vehicle registration, general business license, and several other fees. He said the fee hikes will raise the $2-million difference between projected expenditures and the available funding from General Fund resources, outside sources, and the annual Compact Impact reimbursement from the federal government.

For its part, Fitial said, the central government will centralize spending decisions in a bid to make procurement more efficient and apply equivalent standard for cost-saving measures.

To essentially freeze hiring, no currently vacant positions will be funded, with the exception of certain directorships.

Resources

The Department of Finance estimates gross budgetary resources to reach $169.55 million in fiscal year 2009, which runs from Oct. 1, 2008 to Sept. 30, 2009.

However, some $3.67 million of this amount is earmarked to tobacco control, solid waste management, and the deportation fund. In addition, $7.47 million will go to payment of debts.

This leaves $158.4 million available for appropriations.

Finance Secretary Eloy S. Inos, in a memorandum to the Office of Management and Budget, said the net estimate assumes continued operation of certain garment factories through the first quarter of FY2009. It also includes assumption for a slight growth in tourist arrivals.

Further, the estimate assumes continued suspension of earmarking laws. The suspended provisions include the mandatory payment of alien worker fees to Northern Marianas College and public schools, 10 percent of the gaming jackpot tax to public schools, 10 percent of CNMI poker fees to the Workforce Investment Agency and 50 percent to the NMI Retirement Fund, 70 percent of hotel taxes and 25 percent of alcoholic beverage taxes to Marianas Visitors authority, and 30 percent of hotel taxes and 20 percent of alcoholic beverage taxes to the NMI Retirement Fund.

Inos also said the revenue projection includes $2.57 million that the Office of the Public Auditor expects to receive from autonomous agencies for prior years’ OPA fees, as well as some $4.1 million that the Northern Marianas Housing Corp. will pay the Marianas Public Land Trust for loan interests payments.

The governor expressed hope that the FY2009 budget process will run smoothly.

“I urge that in the spirit of harmony by way of putting all bipartisan and special interests aside, we all immediately get to work on the FY09 budget and ensure that we have one in place and effected by 1 Oct. 2008,” said the governor.

The CNMI government failed to pass a budget for fiscal year 2008 through the fault of both the administration and the Legislature. The governor submitted his budget proposal on Sept. 10, 2007, leaving the Legislature less than a month to review and pass a timely budget.

Shortly before ending session in January 2008, the 15th House of Representatives passed a budget bill. But no action was taken in the 15th Senate.

The new House passed another appropriation bill last month. But disagreements with the Senate prevented the bill from becoming law.

Last week, both houses rushed to passage a package of “interim fiscal measures” that would allow the government to continue operating under the FY2007 budget level despite declining collections.