Even as the House of Representatives is poised to vote on the fiscal year 2013 budget bill today, one ranking member of the chamber's leadership has already made known his dissatisfaction with the measure and urged his colleagues to study it carefully before voting on the bill.
Rep. Edmund Villagomez (Cov-Saipan), chairman of the Committee on Commerce and Tourism and a member of the Ways and Means committee, said he is voting “no” to the $114-million general appropriations bill primarily because it is hinged on $12 million in additional government revenue he believes is too optimistic.
“Just over a week ago, on July 2, the governor proposed a revised budget that replaced his original April 1 submission. This revised budget increased the amount that he initially identified by $12 million. This revised budget from $102 million to $114 million has its pros and cons,” said Villagomez in a letter addressed to acting speaker Felicidad Ogumoro (Cov-Saipan) that was released to the media yesterday.
On the one hand, the Gov. Benigno R. Fitial's revised proposal effectively eliminates austerity measures as employees on a 64- or 72-hour work pay period will be able to earn up to 80 hours and paid holidays will be restored.
On the other hand, Villagomez said, the proposal effectively kills the NMI Retirement Fund's defined benefit contribution plan and moves every member of the plan to the U.S. Social Security System.
He said the governor's proposal, which the House has adopted, projects an increase in business gross revenue tax in what the Fitial administration is calling a very conservative $12 million.
“It is my understanding that the governor wants to take this conservative $12 million and use it to end austerity measures. Now, while I am in favor of ending austerity measures, I am concerned that this figure, this $12 million, may be too optimistic. Do we reasonably foresee a $12 million increase in BGRT and total revenue? And let's just say that this conservative projection is off by a few million, what happens to the people of the Commonwealth if austerity measures are re-implemented because the actual numbers fall short of the $12 million?” asked Villagomez.
The congressman also equates the passage of the Fitial administration budget bill as effectively telling the retirees that the CNMI will no longer fund the Fund's defined benefit plan.
“By passing this bill we are telling active members that they have no say and that Social Security is what they're going to get. But exactly what does this mean? Where are the other draft bills from the administration? Are we starting in the Social Security System from scratch or are we getting the option of a buyback? We have all heard the expression: Don't count your chickens before they hatch. With all due respect, we are counting the chickens not just before they hatch, we are counting them even before the eggs are laid.”
Villagomez is also questioning the Executive Branch's calculation on the budget, given that when the budget was in excess of $120 million a couple of years back it didn't prevent the CNMI government from instituting austerity measures.
“Let's not forget that at $120 million plus we implemented austerity measures and cut the pay period down to 64 or 72 hours. But at $114 million, or $6 million dollars less, now we can afford 80 hours? Forgive me if I sound a bit skeptical, but as far as I can tell, our government has not shrunk that much and our actual revenues have not increased that much. I have been told that we need an estimated $7 million in revenue to eliminate austerity. So if our total budget went from $102 million in 2012 to $114 million projected today for FY 2013, it would appear that we have more than the $7 million that we need, right? I am not so sure.”