House rejects Senate budget version

Rep. Patrick H. San Nicolas (R-Tinian), right, confers with House Ways and Means Committee chair Rep. Donald M. Manglona (Ind-Rota), center, and Rep. Angel A. Demapan (R-Saipan) during a recess in the House session yesterday. Only San Nicolas voted against rejecting the Senate’s version of the budget bill for fiscal year 2022. (FERDIE DE LA TORRE)

The House of Representatives rejected yesterday the Senate’s version of the $144.84-million budget bill for the CNMI government’s operation in fiscal year 2022, triggering the formation of a bicameral conference committee that will be tasked with hammering out a mutually acceptable budget that must be enacted before the fiscal year ends on Sept. 30, 2021.

A total of 15 representatives voted “yes” to House floor leader Rep. Ralph N. Yumul’s (R-Saipan) motion to reject the Senate version of House Bill 22-74. Only Rep. Patrick H. San Nicolas (R-Tinian) voted “no” to rejecting the bill. Absent at the House session, but excused were Reps. Blas Jonathan T. Attao (R-Saipan) Joel C. Camacho (R-Saipan), and Joseph A. Flores (Ind-Saipan).

House Speaker Edmund S. Villagomez (Ind-Saipan) then named the House representatives who will be on the conference committee: Ways and Means Committee chair Rep. Donald M. Manglona (Ind-Rota), Rep. Christina E. Sablan (D-Saipan), and Rep. Leila Staffler (D-Saipan). Rep. John Paul Sablan (R-Saipan) was named an alternate.

Senate President Jude Hofschneider (R-Tinian) is expected to name soon the Senate representatives 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. In this case, the conference committee will be working on a deadline to ensure that they come up with a budget that the Legislature will pass and bring to the table of Gov. Ralph DLG Torres before the end of the month. Without a budget for the new fiscal year, the CNMI government will be forced to shut down.

During yesterday’s discussions, Manglona said they appreciate the Senate’s speedy review and approval of certain provisions of the budget that the House had proposed, but there are several provisions that they’re concerned about and would like to address in the conference committee, particularly the salary adjustments for Cabinet members.

Manglona pointed out that, while the House approved the governor’s American Rescue Plan Act spending plan, current law sets a cap on salaries, so even by approving Gov. Ralph DLG Torres’ spending plan, there’s still a law in place that would not allow any certain individuals to go beyond the cap.

He noted that in the Senate version, they approved any salary adjustment and they’ve also taken out section 604 overtime payments, which will now essentially allow those that are affected by this cap to receive any additional payments.

Manglona said they also heard in public comments that there may be a concern regarding certain individuals and their salary increases and so that’s one of the issues that they would like to address in the conference committee.

Lastly, he said, the $2.6 million that was taken from the Commonwealth Healthcare Corp.’s subsidy, they will need to address where those funds would go, or how can they put some money back into CHCC.

Additionally, Manglona said, they also received communications from the Marianas Visitors Authority, which stated that while they did not submit any comments at the time of the passing of this bill in the House, after seeing the Senate’s version they have reached out and have requested that their request be considered.

“And so that’s something that we can bring up to the conference committee,” he said.

Manglona said his Way and Means Committee urged colleagues to reject the Senate’s bill and they will bring this up to the Senate and see where they can compromise.

Rep. John Paul Sablan (R-Saipan) said that, although there are some amendments made by the Senate that he agrees with, such as the restoration of local funding for the scholarship office, there were some amendments that he does not actually necessarily support such as the $2.6 million subsidy that was cut from CHCC.

“Therefore, my vote for the record will be yes for rejection,” Rep. John Paul Sablan said.

Rep. Angel A. Demapan (R-Saipan) asked Rep. Manglona if he has any information from the Senate on the rationale for all these $1 contingencies in the municipalities. Manglona replied that they have not obtained any clarification about that and so that is another thing that they would like to address in the conference committee.

Demapan echoed Rep. John Paul Sablan’s position that he appreciates the restoration of the scholarship fund, but he does not appreciate removing the CHCC fund. “I was kind of looking forward to a budget that we can all agree upon, but this one is hard to swallow at this point,” Demapan added.

When asked why he voted “no” to rejecting the Senate’s version, Rep. San Nicolas said this was because the mayor of the second senatorial and members of the legislative delegation (Tinian and Aguiguan) were satisfied with the funding allocated under the Senate version.

San Nicolas said it is his understanding based on Manglona’s explanation that many of the lawmakers’ concerns was the cut made on the CHCC budget and not the funds allocated to the second senatorial district.

“It is my hope that the end product of the conference committee [will be] that funds allocated to the 2nd senatorial district remain, so that we can provide the necessary services to our people in the 2nd senatorial district,” he said.

San Nicolas, however, said he welcomes any additional funding if both chambers come to an agreement.

San Nicolas said he was compelled to support the Senate version, considering that the Senate gave additional funds to the second senatorial district.

From the $144,848,801 total identified budgetary resources for fiscal year 2022 and minus debt service, this leaves the government $98,897,301 that’s available for appropriation. Including the $4,487,022 budget for the Department of Public Lands, the grand total revenue available for appropriation is $103,384,323.

With $175 million in ARPA funds, senators appropriated $278,384,323 in combined general local funds and ARPA funds.

The Senate’s version says that the Legislature concurs with Torres’ use of ARPA, as provided in Volume 4 of the governor’s annual budget submission of April 2021 as amended in July 2021, and the ARPA Section 602 to fund salary adjustments for government employees for Fiscal Year 2022.

What the Senate did was they take Volume 4 of the governor’s submission of the ARPA funds and embedded the amounts in the budgets of the departments and agencies and municipalities and the different branches of government.