Admin asks Legislature to pass funded laws

The Fitial administration has urged the Legislature to pass funded laws to avoid issues of unfunded liability and major government agency deficits.

Press secretary Charles Reyes Jr. said if the Legislature wishes to change policy, lawmakers must ensure that their actions do not result in the government accruing unfunded liabilities with the Commonwealth Utilities Corp. or other government agencies.

Reyes explained Fitial’s position to the Saipan Tribune when asked about the House of Representatives’ approval of legislation exempting low-income utility customers from the $60 reconnection fee.

By a vote of 14-1, the House recently passed a bill designed to benefit residential CUC customers who currently receive or qualify for the Low Income Home Energy Assistance Program.

Only Rep. Tina Sablan opposed the bill. She said she voted against the legislation “primarily because we did not know exactly what the cost impact would be for the proposed program, and it seemed irresponsible to me to create a subsidy program without having at least a vague idea about its cost or how we would pay for it.”

Reyes noted that the problem of the passage of bills that grant compensation without the simultaneous allocation of funding to replenish the hole left by the subsidy has been encountered numerous times.

Reyes cited the situation of the CNMI Retirement Fund as an example of the problem. “That has resulted in major unfunded liability and major deficits,” he said.

Reyes said the politically popular bills favored by the Legislature don’t “make sense” from a strict financial standpoint.

“I think the governor would be in favor [of the legislation] if you can show a funding source,” he said. “It is up to the Legislature to show the funding source because somebody has to pay for the service.”

Reyes pointed out that connecting disconnected utility services costs money.

“The question is, what is the cost? And if the consumers are not going to bear it, who’s going to bear it for them?” he asked.

The source for bearing the costs, according to Reyes, should be identified because the lack of a source results in notable financial problems.

Reyes said the administration agrees with Rep. Sablan’s position on this matter.

“We disagreed with her on other issues, but we try to work with her as best as we can, along with all the legislators. There are differences in policy but ultimately we try to arrive at the most economically sensible policy, especially in this trying economic time,” he added.