Governor: Some $134M budget eyed for FY 2015

Gov. Eloy S. Inos said his proposed fiscal year 2015 budget is around $134 million but the number was still being finalized as of yesterday, the eve of his April 1 deadline to submit a new spending package to the Legislature. The current budget is only $123.4 million, which somehow brings the CNMI back to the 1990 level of $120 million.
No work hours cuts are planned but the administration expects agencies to continue to be prudent with their spending.

The governor said his proposed fiscal 2015 budget contains the consolidation of at least two divisions with overlapping functions and with similar skill sets of personnel.

After the governor met with the four municipal mayors yesterday afternoon on Capital Hill, Saipan Mayor Donald Flores told Saipan Tribune that Saipan got an increase of over $300,000—from $1.345 million in 2014 to $1.7 million in the governor’s proposed 2015 spending plan.

Tinian Mayor Ramon Dela Cruz separately said Tinian and Rota got budget cuts compared to the 2014 level. He said Tinian’s budget is proposed at $5.5 million for 2015, down from $5.9 million in 2014.

“I’m very sad because Tinian also was cut close to half a million versus [the current] fiscal year,” he said after emerging from the governor’s council meeting. He said the Northern Islands also got a slight increase just like Saipan.

The governor, in an interview hours before the meeting with mayors, said under his proposed 2015 budget, the Division of Grounds and Maintenance under the Department of Public Works will be “merged with” the Division of Parks and Recreation under the Department of Lands and Natural Resources.

This comes a year after he initially proposed to privatize the services of the Division of Parks and Recreation, but doing so proved to be costly. DLNR and the administration thus looked for other ways to make the roads and tourist site maintenance services more cost-effective and more efficient.

“We think that maybe if we can consolidate the two activities—DPW Grounds and this [DLNR Parks and Rec], hopefully that would work out,” he said.

Once the two divisions are consolidated, they will fall under DLNR.

DLNR Secretary Arnold Palacios confirmed last night that the governor discussed the consolidation of the two agencies during Cabinet meetings.

“We will be pooling the resources together, consolidate the functions since they have almost the same resources and the personnel’s skill sets are also the same,” Palacios said in a phone interview.

In the 2014 budget year, the governor was able to successfully merge the Workforce Investment Agency with the Department of Labor, among other things.

The difference in the 2014 and 2015 budget is expected to add to the government’s $27 million minimum payment to the retirement settlement trust fund for 2015.

In the 2014 budget, only $20 million was set aside for government employer contribution to the Retirement Fund but when the settlement agreement was finalized, the government still has to come up with an additional $5 million to meet the $25 million required payment this year. The governor hopes to address this by way of a 2014 supplemental budget submission to the Legislature.

Fiscal year 2015 is from Oct. 1, 2014 to Sept. 30, 2015.

While the governor has until today to submit his budget to the Legislature, the Legislature has until Sept. 30 to pass a budget or there will be a government shutdown by Oct. 1.