‘Compromise’ budget eyed within days

Acting Senate president Victor Hocog (R-Rota) appointed Friday three Senate conferees that, together with their counterparts from the House of Representatives, are expected to come up with a $134.33-million budget bill that is acceptable to both chambers as early as this week, less than a month before the budget deadline.

Hocog said if the conferees begin meeting today or tomorrow, a “compromise” budget could be done before the end of the week.

“If all goes well, we could have a back-to-back session as early as Thursday to act on the conference budget bill,” Hocog told Saipan Tribune.

House Ways and Means Committee chair Tony Sablan (Ind-Saipan) said he does not see any reason why a compromise budget bill won’t be finalized “within days.”

Sablan heads the budget conferees from the House, along with vice speaker Frank Dela Cruz (Ind-Saipan) and floor leader Ralph Demapan (R-Saipan).

Hocog, meanwhile, appointed as Senate conferees Fiscal Affairs Committee chair Jovita Taimanao (Ind-Rota), Sen. Pete Reyes (Ind-Saipan), and Sen. Frank Cruz (R-Tinian).

The House rejected on Thursday a Senate-amended budget bill over what they deem as an unconstitutional provision, salary increases, and advance quarterly allotments, among other things. This automatically led to the formation of a bicameral conference committee to hash out the differences between the two budget versions.

Hocog recognizes that his floor amendment to the budget bill was one of the main reasons for the House’s rejection of the Senate-amended budget bill.

“But I want to know from the counsels what makes that provision unconstitutional,” Hocog said.

House members deem “unconstitutional” a Senate-added provision allowing a waiver on any electronic gaming licensing fees, machine fees, and CNMI taxes up to $400,000 assessed against private firm Bridge Capital LLC or its assigns for fiscal year 2015 and offset it with the total amount of $400,000 that the CNMI government owes Bridge Capital for unpaid La Fiesta leases.

Once the bill becomes law in its current form, it also allows Bridge Capital to “sell or transfer” these credit amounts to any entity that has an electronic gaming license on Saipan.

Hocog said he does not see any reason why such a provision won’t be a win-win for the government and Bridge Capital, which he said is interested in operating electronic gaming machines on Saipan.

“Bridge Capital has an upcoming business. If they have 100 electronic gaming machines, for example, that’s already $250,000 in one year in license alone. That will also result in business gross revenue tax and multiplier effects. The government will be able to repay its debt to Bridge Capital and then will generate revenue from Bridge Capital operations,” he said.

The senator said the government should not ignore its debts that start only with hundreds of thousands of dollars but later balloon to millions because of non-payment while it is still manageable.

“And how long will the government lease the property?” he asked. Rather than continue accumulating a $200,000-a-year unpaid lease for the La Fiesta Mall, Hocog said the government can just offset at least $400,000 of that debt.

The senator said he has faith in the conferees that this and other issues of concerns in the latest version of the budget will be resolved.

Hocog said he will be asking Taimanao to meet with the chairman of the House conferees as early as today, followed by a meeting of all the conferees.

If there is no new budget law in place by the start of the new fiscal year on Oct. 1, the government would have to shut down again, like in 2010 when the Senate and House couldn’t compromise on the spending package.

Besides the debt offset provision, there is also a House concern about salary increases of up to more than $15,000, including those for the Finance secretary and directors.

Some lawmakers are also crying foul over cuts in House and Senate members’ operational funds by some $7,000 to be able to give Tinian close to $400,000. House members also do not agree with the Senate’s provision allowing a three-month advance allotment.

Unlike in previous budget seasons, this year’s differences in the budget are not on the amount of appropriations for agencies and departments but more on “administrative” provisions and policies.