‘Only options left are austerity Fridays, unpaid holidays, increasing biz license’

The only options left to realize the $158.4 million budget plan for 2009 are to revisit the austerity Fridays and unpaid holidays, raise business license fees by 100 percent, and the possibility of taxing the federal Cost of Living Allowance, according to the chairman of the Senate Committee on Fiscal Affairs.

Sen. Maria Frica T. Pangelinan made the assessment after a joint meeting between the House and Senate on the proposed 2009 budget that lasted almost three hours yesterday.

Aside from some lawmakers, present at the meeting were Finance Secretary Eloy Inos, governor’s special assistant for administration and for management and budget Esther Fleming, Civil Service Commission executive director Norbert Sablan and his legal counsel, John Cool. No representatives from the Office of Personnel Management showed up.

Lawmakers are preparing to draft legislation based on the administration’s proposed fiscal year 2009 budget.

In an interview with Saipan Tribune after the meeting, Pangelinan said she provided alternative options like the sliding scale reduction, but this is evidently not possible because it would involve a very complex legal procedure to reduce salaries.

Austerity Fridays, on the other hand, is more flexible and workable in that it applies to everybody and the employees have a day off, Pangelinan said.

“So you don’t pay them, rather than do reductions, which is more complex and involves legal issues because of the civil service…the protection on their salaries as civil service employees,” she said.

Pangelinan’s earlier proposal was to reduce the salaries of those earning $30,000 and up, exempting those who are making $30,000 down.

“Anyway, that’s not workable,” she said.

Left with just a few options (austerity Fridays, unpaid holidays, increase in business license fees, and taxing COLA), Finance Secretary Inos is expected to provide the listing of resources adjustment because “there has to be an adjustment” on fiscal year 2009 resources.

Gov. Benigno R. Fitial originally submitted a budget of $158.4 million for FY 2009. The budget is now down to $154.3 million because of the funding that was already earmarked to pay Commonwealth Utilities Corp.’s loan and projects.

“We have a revenue shortfall. According to Secretary Inos there is still a $19 million gap in the budget. He is saying that, based on the expenditure layout, we are short by $19 million,” she said.

The senator quoted Inos as saying that there are so many liabilities and unexpected expenditures—like the bailing out of CUC—that skewed the budget projections.

Inos also stated that aside from cutting personnel costs, there is a need to address the remainder shortfall.

“We all agreed that the budget requires a working relationship and the cooperation of the Executive Branch and the Legislature and, instead of everyone doing their own thing, you need to perform as a group,” Pangelinan said.

She said they are going to meet at least twice a week starting next week to make sure they arrive at an appropriation bill that they could agree on.

In a separate interview, Inos said what they are doing right now is setting the limits of the $154 million appropriation.

“So from that $154 million, we are going to have to budget Department of Public Safety, CUC, Public School System, and all the other agencies,” he said.

Inos said they were not able to identify other funding sources other that what they have already identified.

“So the crux of the meeting is really how to bring down the expenditures to the identified resources so that we can have a balanced budget,” Inos said.

“We have basically bled the turnip and there’s not a drop of blood in it already. So we are going to have to see if we can reduce the turnip or extend the turnip…basically squeeze every source of revenue out there, short of increasing the tax,” he added.