Budget calculated ‘without austerity’

The fiscal year 2020 budget, calculated without any austerity cuts, is a step closer toward enactment after the Senate passed its own version yesterday, identifying over $233.2 million in revenue, of which over $148.8 million is available for appropriation.

Rep. Ivan A. Blanco’s (R-Saipan) House Bill 21-64, HD2, SD1 now heads to the House after garnering a vote of 6-1, with Sen. Paul Manglona (Ind-Rota) as the lone opposer.

Including Department of Public Lands personnel, the budget accounts for a total of 3,500 government employees across the CNMI. 

The Public School System’s proposed budget of $37.71 million satisfies the constitutional mandate of 25% of the CNMI general funds, minus the earmarks.

This comes soon after several days of back-and-forth discussions between members of the House and Senate in an effort to avert going into a conference committee, which is only activated when the two chambers of the Legislature fail to see eye-to-eye on the bill.

Responding to a question raised by Manglona whether there are austerity measures embedded in the new budget bill, Sen. Sixto Igisomar (R-Saipan) pointed out that the austerity measures that are currently in place are based on the current fiscal year.

“This budget is a balanced budget in consultation with the governor and the House, so we do not believe that there should be any form of austerity,” said Igisomar, who is a member of the Senate Fiscal Affairs Committee that reviewed the budget bill.

“…The austerity was put in place because the current [fiscal year 2019] budget was low on revenue resources and, in our consultations with the secretary of Finance, he assured us that the source of revenue resources is available for this current budget we are passing,” he added. “Everything in this budget is based on normal government operation hours.”

Manglona attempted to insert two amendments to the bill but they were not seconded and could not move forward and were not entertained.

Future tweaks

The budget bill this year took into consideration the enactment of H.R. 2328, which effectively allows the CNMI to receive all of its federal Medicaid reimbursement funds for fiscal year 2020. These funds amount to over $5.3 million.

Sen. Jude Hofschneider (R-Tinian), who also chairs the Senate Fiscal Affairs Committee, told Saipan Tribune in an interview that should H.R. 2328 become law, the $5.3 million for the CNMI Medicaid program reimbursement will automatically go to PSS.

“We are very concerned with PSS and we wanted to support [the state education agency],” he told Saipan Tribune.

Among some other tweaks the Senate approved were changes to the upcoming $2.5 million from the Commonwealth Worker Fund as provided in U.S. Public Law 115-218. This is also known as the CW fee funds.

The Senate passed amendments to allocate $1.3 million from the CW fee funds to the newly created Northern Marianas Technical Institute, provided that NMTI offer classes on Rota and Tinian through both islands’ high schools.

Some $600,000 of the CW fee funds goes to PSS for its Career and Technical Education Program in high schools; $500,000 goes to the Northern Marianas College for vocational education, apprenticeships, or other training programs provided that $50,000 of the funds allocated to NMC shall be used for the college’s nursing program equipment and supplies; and the remaining $100,000 goes to the Department of Commerce, Statistics Division for the CNMI prevailing wage study.

U.S. P.L. 115-218 specifically stated that the funds collected from the CW fees shall only fund vocational education programs, apprenticeships, or other training programs for training future U.S. workers.

The CNMI Cannabis Commission, which has yet to be completed, was appropriated $551,479.

Several other agencies, including the Commonwealth Health Care Corp., PSS, the Northern Marianas College, and the Department of Public Safety also receive appropriations for this fiscal year from sources outside of the general fund. These outside sources include the Compact Impact fund, Tobacco Settlement Funds, and more.

“I thank the members of the Senate FA committee as well as the members of the Senate who supported the budget bill,” Hofschneider said. “I look forward to the House speaker and the membership of the House in accepting the Senate draft so that we can move ahead in transmitting the budget bill for [enactment].”

House Speaker Blas Jonathan “BJ” Attao (R-Saipan) told Saipan Tribune that he appreciates the Senates fast action on the budget bill.

“I appreciate the fact that the…members of the FA committee took the time to wrap up the budget at the soonest that they can and the Senate got the budget out of their body for our review at a timely manner, so we can go from there and get it to the governor…for action in the coming weeks,” he noted, adding that there was still “ample time” for Gov. Ralph DLG Torres to review the budget.

Torres is given by the CNMI Constitution up to 20 days to review the budget. Hofschneider is confident that a final budget will be at the governor’s desk before the deadline of Sept. 30, 2019.

Failure to meet that deadline will result in a partial government shutdown until an expenditure bill for fiscal year 2020 is enacted.