Budget bill vetoed anew

As expected, Gov. Benigno R. Fitial vetoed anew yesterday the proposed Fiscal Year 2009 budget, citing a number of concerns that he said were “overlooked” by the Legislature and could result in payless paydays and the total shutdown of government operations.

In his veto message to legislative leaders, he said the Legislature failed to address how the same number of employees and the same programs and operations will continue at the same level with the reduced resources.

Lawmakers revised the budgetary resources from $156 to $148 million after the Finance Department reported a drop of $8.6 million in projected revenues in FY 2009.

Fitial said that based on the bill, every departments’ personnel budget is reduced by 5 percent while the number of employees and their salaries remain intact.

“There are difficulties in this legislation that cannot be overlooked,” he told Speaker Arnold Palacios and Senate President Pete Reyes.

Accepting what the Legislature proposed, Fitial said, would result in the shutting down of the entire government because it will have no resources to pay its employees.

“Employees will have payless paydays or departments must begin laying off employees to operate until the end of fiscal year,” the governor said.

As none of these options are desirable, he said it is imperative that the House and Senate pass legislation implementing austerity measures.

Unconstitutional

Besides the budgetary allocation, the governor believes that other provisions and conditions in the bill calls for disapproval.

He cited as unconstitutional the wish of lawmakers to give House and Senate presiding officers the hiring authority for the Executive, Legislative, and Judicial branches of the government. He emphasized the clear constitutional mandate that separates the powers between each of the three entities.

“It is unconstitutional, therefore, to subject the Judicial and Executive branches to legislative authority where hiring practices are concerned,” he said.

A provision in the proposed bill also requires that the Labor secretary prepare and present a report to the Legislature no later than May 1, 2009, addressing various labor matters not relevant to the budgetary process or allocation.

Fitial said matters relating to the effects of the federalization law and local law, job placements of residents, and other foreign workers’ concerns have no bearing in the appropriations for the Labor Department.

The Legislature’s wish to grant conditions on some federal grants was also cited by the governor as a “contravention” to what was agreed upon with the granting agency.

Fitial said Section 723 of the bill incorrectly distributes Compact Impact funds to seven grantee departments in opposition to conditions for the grant.

“Reprogramming of the said funds requires resubmission of figures to the grantor and approval thereby. The Legislature acted in contravention to the grant conditions by redistributing the amounts as shown in the measure,” the governor said.

‘Impact cannot be ignored’

The governor said the recent decision of Northwest Airlines to terminate its Osaka-Saipan direct flights is a factor that cannot be ignored in identifying available resources for the CNMI government.

“The recent developments in the airline industry force the government to prepare for further reduction in available resources,” he said.

Northwest Airlines recently announced that it will soon stop the Narita-Saipan nightly flights and that it will reduce its daytime flight by 116 seats.

“This loss comes after Northwest’s previous announcement that it will terminate the Osaka direct flights. The loss of the Narita nightly flights and the reduction of the Narita daytime seats translate to a loss of 43,780 seats for the remainder of the FY 2009 upon its implementation,” the governor noted.

He said total projected negative economic impact to the CNMI is $88.9 million.

“Such significant impact cannot be ignored in addressing the available resources and the ability of the government to continue serving the Commonwealth,” Fitial said, urging the Legislature to pass a bill to implement the necessary austerity measures to continue delivering essential services.