House rejects Senate budget

With an 18-2 vote, the House of Representatives rejected during yesterday’s special session the Senate’s version of the $96.47-million budget for fiscal year 2021, setting the stage for a conference committee that will sit down to hammer out a compromise budget version and, with only two days left before the fiscal year ends, there is a likelihood that the CNMI government may be forced to shut down—as required by law if no budget is enacted by Oct. 1.

Only Reps. Donald M. Manglona (Ind-Rota) and Antonio San Nicolas Borja (R-Tinian) voted against rejecting the Senate’s version.

After the vote, House Speaker Blas Jonathan Attao (R-Saipan) immediately announced the appointment of Reps. Ivan A. Blanco, (R-Saipan), House floor leader John Paul Sablan (R-Saipan), and Joel C. Camacho (R-Saipan) to the conference committee. Attao said he will appoint another as an alternate committee member. Senate President Victor B. Hocog (R-Rota) has to appoint three senators too to the conference committee.

A conference committee refers to a joint committee appointed by the House speaker and the Senate president to resolve disagreements on a specific bill.

Blanco, who chairs the House Ways and Means Committee, said in a later interview that they await Hocog’s appointees to the conference committee. As soon as Hocog names his appointees, they are going to sit down to come up with a compromise bill, he added.

Blanco said they have more commonalities than differences with the Senate’s version and the House’s version. “So what’s [going to] happen is, all the actions that they took, we’ll sit down with them and say, okay, this is our position. This is what we agree with. This is what we do not agree with. What is yours? Then we go back and forth until we come to a decision,” he said.

Blanco said the last time there was a conference committee was for the fiscal year 2019 budget.

He said they understand that Rota and Tinian have municipalities to run and the House did its best to adequately fund them, yet the numbers they saw in the Senate’s version were unreasonable. In the proposed Senate version, he pointed out, there was an increase of $1.8 million for Tinian and $1.3 million for Rota, or a large $3.1 million increase over the House’s version.

Blanco said Saipan’s municipal budget was increased too, but only by $247,000. “So when you compare what the House passed to what the Senate is considering, that’s a ratio of 12 to 1 in terms of what the First and Second Districts were allotted compared to the third Senatorial District (Saipan),” Blanco said. “Based on this information, we do not feel confident that we can approve the Senate version of the budget if this case remains unresolved.”

In the House version that it passed last Aug. 5, representatives took the $82 million that the governor identified as the net total available for appropriation and they stayed within that figure. “That’s a balanced budget,” Blanco said.

He said they wish they could have given more to certain areas but they had to make tough decisions. In the end, he said, the House’s balanced budget accounted for the government’s operations and its debts.

Blanco said they did this while not touching about $13 million in earmarks that the governor had set aside for Group Health Life Insurance, Solid Waste, Marianas Visitors Authority, and Marianas Public Land Trust. Blanco said these earmarks were not included in the governor’s proposed figure of $82,656,213 for the net expenditure budget for fiscal year 2021.

By identifying $82 million, Blanco said, the governor set the cap for all intents and purposes. By removing these earmarks in the Senate version of the budget, the Senate reduced $13 million by 25%, which means they have $3.25 million less to pay for these obligations.

By appropriating the entire $144 million gross amount that was provided by the governor that includes the earmarks, the Senate appears to be exceeding the working cap and underfunding the original earmarks, he added.

“We feel bad that the possibility of a government shutdown exists, if we do not see eye to eye on the Senate version but we cannot pass an unbalanced budget or use funds we really do not have,” he said.

Blanco assured that they will work hard and “burn the midnight oil” if need be, to have a budget that satisfies both legislative chambers on the governor’s desk for his consideration as soon as possible. “We may not agree with the current budget proposal but we will work together to avert a shutdown,” he added.

Last Saturday, the Senate passed its version in the budget bill that proposes $96.47 million in available revenue and resources for fiscal year 2021.

The House adopted last week the Senate’s version of a House resolution that proposes the same $96.47 million in available revenue and resources for appropriation for government activities in fiscal year 2021. The Senate’s version is $13.81 million more than what the House had adopted in the amount of $82.65 million.

Last July 1, Torres submitted a revised revenue projection in the amount of $144.41 million. Of this amount, the governor approved $82.65 million for government appropriation.