Govt layoffs may be imminent

Gov. Benigno Fitial could use his authority to reduce the government workforce if the Legislature fails to pass a measure reducing the workweek to four days, according to press secretary Charles Reyes.

Reducing the workforce is not something that the governor wants to do, Reyes said, but with a projected decrease in local revenue, such austerity measures must take place.

“It’s not an option that we relish or look forward to at all,” the press secretary said. “But that’s always a possibility. All the governor would have to do is issue those notices to civil service employees pursuant to the rules and laws and regulations. And he could essentially force layoffs. But I think the better solution is to have this compromise and have the Legislature support these proposed austerity measures.”

Fitial can implement the austerity measure for contract employees but civil service employees do have more legal protection, Reyes said.

“Our Attorney General’s Office has been looking into it. There are some different views on that. I think the safest course is to get legislative sanction, if at possible. But the governor does have certain powers, whether that falls under powers of the Constitution, I think a case can be made. Of course, the courts may not see it that way and it’s never been done before, but we’ve never seen a situation like this before.”

The administration’s bill, currently in draft form, calls for a 64-hour pay period with workers’ salaries reduced accordingly and six unpaid holidays for the rest of the fiscal year. Essential departments, such as health, education and public safety, would be exempted.

“It’s gotten to the point where major cuts need to be made. The longer we delay it the worse off we’ll be,” Reyes said.

In December, when Fitial vetoed the Legislature’s initial $165.4 million budget—citing an $8.7 million drop in projected revenue—he urged the House and Senate to implement austerity Fridays and non-paid holidays. After he vetoed the budget, Fitial slashed government spending across the board by 5.5 percent for the rest of the fiscal year.

Fitial has until Feb. 10 to approve, line item veto or veto the Legislature’s revised $156.76 million budget. The latest proposed budget does not include austerity Fridays and non-paid holidays; instead, it reduces the original department spending levels proportionately to Fitial’s 5.5 percent reduction. The $156.76 million budget allows for 4,021 full time employees.

The administration realizes enacting austerity Fridays is a very politically unpopular decision, press secretary Reyes said. “Unfortunately,” he added, “the financial situation warrants this type of action and it’s very difficult.”

Reyes noted that the Legislature has imposed austerity Fridays in the past. In 2006, Public Law 15-24 was passed, reducing the government pay period to 72 hours for fiscal year 2007.

“Remember, they did approve it once before and that provision expired and it was never renewed,” Reyes said. “So it’s possible if the Legislature gets all the facts and really appreciates the situation they may go ahead and do something,” he said, adding that a compromise could also take place.

“They may not go all the way, buts it’s possible they may have no other choice but provide some sort of relief.”

Rep. Oscar Babauta, who was House Speaker when PL 15-24 was passed, said savings were realized during fiscal year 2007, and he would support a similar bill.

“This will continue to save jobs in government and the government will still be able to provide basic services,” he said.

It’s not something that anybody wants to do, he added, but it must be done.

“Many employees—as hard as it is to swallow—would rather have reduced hours than nothing at all,” he said, adding that even the private sector is hurting because of the economic downturn.

Fitial does not want to realize a deficit while he is governor, Babauta said, a statement echoed by Reyes.

“Last year we received a bit of windfall from the cover over funds that allowed us to meet the deficit, the shortfall,” Reyes said, referring to the $18 million dollars the CNMI received from the federal government, eliminating the fiscal year 2008 deficit. “This year we don’t expect any sort of revenue and expect revenue to go down even further.”

Rep. Ramon Tetuteb said he has reservations about re-implementing austerity Fridays. He’s concerned, he said, because the administration recommends the measure yet continues to hire employees.