Gov. Eloy S. Inos signed into law yesterday a $123.4-million budget bill “with reservations,” and asked the Legislature to act on “new and major” revenue-generating measures “within the next 30 days” or he “may be forced to implement austerity measures which may affect personnel services.”
These austerity measures could include work hour cuts once again.
The governor signed the fiscal year 2014 budget bill into Public Law 18-18 in the presence of Lt. Gov. Jude U. Hofschneider, House Speaker Joseph Deleon Guerrero (Ind-Saipan), Senate President Ralph Torres (R-Saipan), and most lawmakers at 12:15pm.
That was after a closed-door meeting with lawmakers on the tentatively approved NMI Retirement Fund settlement agreement.
At the signing ceremony, Inos described the budget bill as “not a perfect document.”
The speaker said a House bill will be pre-filed soon to amend the newly-signed budget law to correct an oversight involving a missing $80 million in the NMI Retirement Fund’s 2014 operations funds.
Without this “correction” bill, the Fund would only have $4 million in FY 2014, enough to pay only one full pension in FY 2014.
In a brief interview after the signing, the governor said his office is now preparing a proposed supplemental budget of “at least $14 million” for the NMI Retirement Fund and the Group Health and Life Insurance Plan.
The newly signed budget law provides $20 million remittance to the Retirement Fund, and this is double the amount that the government pumped into the Fund in FY 2013.
But the government needs to appropriate more to meet the tentatively approved Fund settlement agreement’s requirement.
“As I have indicated in several leadership meetings with the members of the Legislature, an additional $12 million is needed to meet our initial payment under the Settlement Agreement,” he said in his transmittal letter to the Legislature, copies of which were sent late yesterday afternoon.
Prior to the budget signing, the governor held a closed-door meeting on the settlement agreement.
Hours later, the Senate session adjourned its afternoon session without the introduction of any resolution expressing support to those who opt out of the settlement deal.
The governor said the Legislature passed a budget bill at “record speed.”
This has been the smoothest budget process in recent period, ensuring that there won’t be a government shutdown.
“Yes there are more wants than needs. I’m sure we can continue to identify (additional) sources of revenues,” Inos told lawmakers in the governor’s conference room.
The Senate president and House Ways and Means Committee chair Tony Sablan (Ind-Saipan) said the signing of the budget law ahead of the Sept. 30 deadline gives comfort to the public that there won’t be any government shutdown.
“It’s enough that we’re challenged with limited resources so they don’t need the additional anxiety as a result of a lack of passage of budget so we thank everybody for that,” Inos said at the bill signing.
The governor, as well as the presiding officers of the Legislature, thanked lawmakers, the conference committee members, and the Office of Management and Budget for working together to ensure the budget is passed.
The Legislature sent the spending package, House Bill 18-98, House Draft 6, Senate Substitute 1, Conference Committee Substitute 1, to the governor last week.
In his budget cover letter to the Legislature, the governor said the paramount goal is to maintain fiscal sustainability in the midst of meager resources.
“While we see growth in the local economy, serious implications lie ahead if additional revenue-generating measures are not in place to address our current obligations to the Northern Mariana Islands Retirement Fund,” he said.
This is the additional $12 million needed to meet the government’s initial payment under the settlement deal.
“Without the enactment of any new and major revenue generating measures within the next 30 days, I may be forced to implement austerity measures which may affect personnel services. This is certainly a route I deeply prefer to avert. Thus, I urge you to act on measures critical towards addressing the Commonwealth’s current financial needs,” he said.
Inos cited 10 specific reservations about the budget bill he signed into law.
These include a reduction in the governor’s reprogramming authority flexibility from the current 100 percent to 50 percent in FY 2014.
“At a time when resources are limited, maximum flexibility is necessary in the reallocation of appropriated funds so as not to impair delivery of essential public services,” he told the Legislature.
He pointed to major cuts in utilities allocation made to Rota and Tinian, NMASA, and the Office of Personnel Management totaling $539,190 and “were redistributed among respective departments and agencies for non-utility expenditures.”
While the budget law provides for the amended salaries of the Finance and Commerce secretaries, it did not address the governor’s request to include the salary of the Department of Community and Cultural Affairs secretary at $54,000.
“Since these changes require a change in permanent law, I urge the passage of a separate legislation amending 1 CMC Section 8245 at the earliest possible time,” Inos said.
He said Section 704 Subsection (b) mandates the Veterans Affairs Office to allocate one employee each to Tinian and Rota but without explanation of the duties provided to support this provision.
The governor said Section 709 Subsection 2 mandates the Joeten-Kiyu Public Library to allocate one librarian aide each for Rota and Tinian. But he also noted that one additional employee is already allocated and funded under Rota’s appropriations for the Rota Public Library.
Inos said the budget measure’s Section 605 or the public auditor’s fee did not address the administration’s recommendations to include a provision to ensure government corporations pay outstanding public auditor’s fees from prior fiscal years.
The recommendation also requires all payments made by a government corporation pertaining to such outstanding fees to be deposited into the “Deferred Defined Benefit Restoration Fund.”
Inos also sought further clarification of the definition of “part-time” employees not performing more than 40 hours in any bi-weekly period that shall not require an approved NOP. Section 103 allows only certain agencies to employ part-time employees.
The governor also noted that the bill did not recognize the need for advance allotments to the CNMI Scholarship program to issue education assistance grant awards and honors scholarship.
He also pointed to the missing $80 million in the Retirement Fund operations budget.
“As it stands, the omission of some $80 million limits NMIRF’s operational expenditure to $4,030,350, an amount that does not cover even a month’s operating expenses,” he told the Legislature.