Halted budget talks draw Inos’ concern

Fiscal year 2016 budget talks have halted as the House of Representatives await a formal opinion from the CNMI Attorney General on whether several Senate provisions within a contentious budget bill violate the NMI Constitution.

The House and Senate are locked in disagreement over the Senate’s proposed use of earmarked funds set aside for the Marianas Visitors Authority. The House maintains this moving around of $2.5 million is unconstitutional; the Senate says it is within their legislative authority.

But even if the House receives the AG opinion today, they would still need to wait three days after announcing their next meeting to reconvene budget talks per the Open Government Act. Both the Senate and House agreed they would abide by the OGA guidelines when they adopted their conference committee ground rules last week.

The fiscal year cliff is less then three weeks away. A new fiscal year begins Oct. 1.

The bicameral committee debating two competing versions of the budget need the majority of six votes—as the House and Senate have three lawmakers each on the committee—to adopt a budget for Gov. Eloy S. Inos’ signature.

Both sides remain locked on one main point of contention: the re-appropriation of earmarked funds that Inos identified as separate from the $145 million figure he capped as “subject to appropriations.”

Inos told reporters, after a press event for donations received from the Governor of Guam, that he would need at least “two weeks” to review a budget sent to him by the Legislature.

The fiscal year cliff has been on the minds of lawmakers and the governor, especially as a partial government shutdown would be an unpopular direction to take amidst the ongoing recovery efforts after Typhoon Soudelor left Saipan in a state of disaster over a month ago.

A partial government shutdown would leave essential services like the hospital and Department of Public Safety open.

Inos told reporters, though, that he has “options.”

“I’ve got alternatives. I’ve got options. Of course, they are all constitutional…” the governor said.

He did not elaborate on these “alternatives” but the governor may have been referring to the authority he currently has via the executive order declaring the CNMI in a state of significant disaster.

Then-acting governor Ralph Torres executed the first order after Typhoon Soudelor tore across the island, causing the local power grid to collapse and leaving government agencies and residents reeling in the wake of the typhoon’s destruction.

Inos renewed this executive order last week. The governor still has control of all CNMI finances and revenues, or “government resources” under this order. If the Legislature remains locked in an impasse over a budget, the governor could—after consulting the Office of Homeland Security and Emergency Management and the CNMI attorney general—choose to continue government operations within this authority and renew the executive order again for a second time if necessary to avoid the closure of government operations.

The order is good for 30 days.

Each day the government is over the fiscal cliff without a government budget, about $50,000 heads back into the pockets of the Department of Finance, Saipan Tribune learned.

When asked if he thought the Senate’s use of the MVA funds went beyond his $145 million “cap” set for appropriations, Inos said, “I think so. …But I haven’t really seen any kind of close to final product, simply because I think it’s a very fluid document right now.”

Pointing to the end of the fiscal year, Inos hopes that this is “impetus enough” for lawmakers to “resolve the impasse.”

It’s unclear if the House received the AG opinion late yesterday afternoon. An opinion was at least not communicated to the House before 2pm yesterday, when Saipan Tribune inquired.

“Personally, I don’t feel an AG opinion is warranted,” said House Speaker Joseph P. Deleon Guerrero (Ind-Saipan) in an interview at his office. “Simply because the issue is governed by the Planning and Budgeting Act.”

“The earmarked funds were not identified by the governor for appropriation. In order for the Legislature to appropriate that figure, the governor would first have to identify those funds as available for appropriations. And only the governor has that authority; the Legislature cannot identify funds for appropriation.

“So absent the governor identifying it, it cannot be touched,” Guerrero said. “This is an appropriation bill and those funds are not subject to appropriation. I think had the governor wanted those funds to be appropriated…he would have identified it in his submission. If he had a need for it to be appropriated, he would have identified it.”

“…It should be clear that it cannot be appropriated,” the House speaker went on to say. “This should not even be an issue.”

Guerrero also acknowledged that the Senate’s measure exceeds the $145 million set by the House concurrent resolution that both the Senate and House adopted.

This resolution “sets the spending ceiling,” Guerrero said.

Sen. Jude U. Hofschneider (R-Saipan), Senate fiscal committee chair and Senate chairman for the budget committee, disagrees.

“We did not increase the $145 [million]. We did not take the two-and-a half million and put it in the $145 [million budget],” Hofschneider said yesterday.

“…We see the potential that [MVA] has to make potentially $12 million for fiscal year 2016. In lieu of that, we ask that you use some of that to…assist other agencies,” Hofschneider said.

“Given the circumstances that some agencies are in dire, desperate need of help…we looked at alternatives and see that other agencies actually have surplus,” Hofschneider said.

MVA has said this is “unconstitutional,” but to this, Hofschneider said they are working within “their authority as legislators.”

Hofschneider emphasized that the Legislature should be cautioned on asking the attorney general for an opinion “especially on issues such as this one,” with a budget law still in the works.

He emphasized that the Legislature should “trust in the guidance” of their legal counsels.