Inos submits $134M budget

Gov. Eloy S. Inos sent to the Legislature his proposed fiscal year 2015 budget of more than $134.33 million—the highest in five years—at around 8:30pm on Tuesday, less than four hours before the deadline. Despite a $10.9 million increase from the 2014 budget, the new spending plan covers more obligations but continues to curtail some costs.
The governor also urged the Legislature to introduce more revenue-generating bills, just days after signing into law a measure that allows casino gaming on Saipan.

Inos, meanwhile, is now on a personal trip to Honolulu, Hawaii, and is expected to be back on Friday, press secretary Angel Demapan confirmed yesterday.

Also off-island are Senate President Ralph Torres (R-Saipan) and Senate vice president Victor Hocog (R-Rota), making floor leader Ray Yumul (Ind-Saipan) acting president from April 1 to 4.

Finance Secretary Larrisa Larson reported gross budgetary resources of $170 million for fiscal year 2015, which runs from Oct. 1, 2014 to Sept. 30, 2015.

Of this amount, $134.33 million is available for general appropriation.

The new budget is also 8.9 percent higher than the fiscal year 2014 budget of $123.4 million.

Inos said the increase is a result of increased tax collections from tourism growth, tax compliance including a tax amnesty program, and stronger enforcement of laws.

Upward growth in tourism throughout 2015 is projected but that growth will be limited to current capacity.

“Hotel rooms and airline seats are at capacity and cannot increase unless additional investment is made in the hotel and airline industries,” Inos said in his budget transmittal letter to House Speaker Joseph Deleon Guerrero (Ind-Saipan) and the Senate president.

Rep. Tony Sablan (Ind-Saipan), chairman of the House Ways and Means Committee, said yesterday that panel members will be given ample time to review the governor’s budget submission before calling a meeting.

Sablan said the committee will schedule hearings on select agencies’ 2015 budget requests.

A new budget bill has to be passed and signed into law prior to Oct. 1 or the government will have to shut down starting on the new fiscal year’s first day and until a budget is passed.

The governor’s proposed budget merges the Division of Roads and Grounds under the Department of Public Works into the Division of Parks and Recreation under the Department of Lands and Natural Resources.

Utility expenses remain decentralized.

The proposed budget also sets aside $220,000 to cover the federally-mandated 50-cent increase in minimum wage on Sept. 30, 2014.

The governor removed all vacant and new positions except those currently announced.

Inos also imposed travel restrictions using local funds.

Retirement, PSS, NMC

Of the governor’s $134 million proposed 2015 budget, $27 million or 20 percent is only for the minimum annual payment into the retirement settlement trust fund.

The Public School System gets over $32.279 million, equivalent to 24 percent of the total general fund resources or 9 percent in excess of the constitutional mandate of 15 percent, the governor said.

Of this allocation, over $28.86 million is to satisfy current actual salaries for PSS and $3.4 million as maintenance-of-effort or MOE allocation.

He said the MOE allocation is to satisfy MOE obligations due to PSS for fiscal year 2010 and partially for fiscal year 2011.

“The central government is committed to fulfilling its outstanding MOE obligation in fiscal year 2016 in the amount of $1,738,940 for the PSS. The PSS has the flexibility on how the application of the additional funding will be used, but we highly recommend the use of these funds to pay down amount owed to the Commonwealth Utilities Corp. for outstanding utilities,” Inos said.

Northern Marianas College gets $3.93 million under the governor’s proposed 2015 budget. Of this amount, $315,192 is to satisfy MOE obligations due to NMC for fiscal year 2010.

Inos said the central government is committed to fulfill its outstanding MOE obligation in fiscal year 2016 in the amount of $590,311 for NMC.

In addition to the proposed budget, $700,000 will be allocated to NMC from the Commonwealth Worker Fee Fund and $86,762 from Compact Impact. Total NMC allocation is $5.031-plus million.

As far as overall government activities funding of $134 million, education gets 28 percent, public safety and law enforcement gets 11 percent, and health gets 6 percent. General government is 33 percent, while the rest—between 1 percent and 4 percent—are for other uses such as for social services and utilities.

Branches, agencies

The governor proposed a total budget of $31 million for the Executive Branch, a drop of $813,000-plus from the 2014 budget.

The Judiciary gets more than $4.526 million, up by $133,874 from the 2014 level.

The proposed budget for the Legislature is $5.558 million, from $5.282 million.

For Rota, the proposed budget is $5.5 million, only a $7,352 decrease from 2014.

Tinian got also got $5.5 million, the same as Rota, but Tinian’s is down by $414,187 compared to the 2014 budget.

The Saipan Mayor’s Office got $1.7 million, up by $354,439 from the 2014 level.

The Northern Islands Mayor’s Office, meanwhile, got $343,886, an increase of $35,132 from the current budget.

The Saipan Municipal Council’s budget is $119,764, up by $11,107.

MVA budget remains at $1.161 million, but MVA has seen an increase in hotel occupancy taxes since April 1 last year.

The proposed funding for the Commonwealth Healthcare Corp. is $2 million, of which over $1.346 million is from general fund and $653,075 from Compact impact funds. CHC generates its own revenues.

Inos said the allocation of the patient referral program in the general fund has been reduced to $1 million. This is because other revenue-generating sources—such as the new laws that legalize casino gaming on Saipan—have been earmarked toward the program.

The governor’s proposed budget also sets aside $1 million for the group health and life insurance, specifically for active retirees. An estimated $4.5 million is earmarked as additional funding.

Employer contribution rate for current members remaining with the Defined Benefit Contribution Plan has been reinstated to 37.39 percent in the budget proposal. A total of 49 employees remain enrolled in the DB plan, of which 14 are from the Legislature and 35 from the Executive Branch.

Credit union, OAG

The governor also proposes $338,751 to return outstanding shares to Commonwealth Government Employees Credit Union members who have no outstanding loans.

Sablan said refund of credit union members was originally planned under a 2014 supplemental budget, but is now included in the 2015 proposed budget.

“This means the credit union will be dissolved,” Sablan said. Those with outstanding loans with the credit union will be referred to the Office of the Attorney General.

The elected attorney general initiative establishes the OAG as an independent agency under the Executive Branch.

Only one quarter of the funds is allocated to the existing OAG in fiscal year 2015 and three quarters to the elected OAG.