House OKs initiative for govt shutdown

The Commonwealth government will shut down if a budget is not passed by the beginning of the fiscal year, under a proposed constitutional amendment approved by the House of Representatives yesterday.

By a unanimous vote, the House passed a legislative initiative removing a constitutional provision that currently allows government operations to continue even if an annual budget appropriation is not enacted.

The initiative now heads to the Senate, where it must receive the approval of at least two thirds of the members. Once it passes the Senate, the initiative will be placed on the ballot in the next election.

Rep. Diego T. Benavente sponsored the initiative. Reps. Ramon A. Tebuteb, Joseph Deleon Guerrero, Ray N. Yumul, and Edward T. Salas signed on as cosponsors.

Proponents of the bill believe that a government shutdown provision will force the lawmakers and the governor to seriously review and enact a balanced budget on time.

The initiative provides an exemption from the shutdown for critical services such as health and safety.

Over the past years, the CNMI government has enacted an average of one budget every four years—usually at the beginning of a governor’s term. In the years that no appropriation was passed, the government continued to operate under the last enacted budget. With the government’s dwindling resources, the “continuing resolution” practice has proven problematic. Because the previous fiscal year’s revenue collection is almost always higher than that of the current fiscal year, deficits have accumulated.

At present, the CNMI government has accrued a deficit of over $170 million.

“There are many costs associated with the failure to enact a budget [and those include] increased operational costs, the inability to deal with contractual obligations, and increased deficit spending resulting from working at the previous year’s spending levels. Other incalculable costs include the decline in public confidence in public officials, damage to the image of the Commonwealth government, and a poor credit rating,” states the initiative.

Research by the House Committee on Judiciary and Governmental Operations, which has recommended passage of the initiative, showed that 23 U.S. states, including Hawaii, provide for government shutdown in the absence of an enacted budget. Thirty-seven states have provisions against carrying deficits into the next fiscal year, which further enforces the principle of a balanced budget.