1-year extension eyed for CHC corp.

House Ways and Means Committee chair Rep. Ray Basa (Cov-Saipan) said yesterday that Gov. Benigno R. Fitial’s proposed $102 million budget for fiscal year 2012 could be increased upon reinstatement of projected revenues from the Commonwealth Health Center once its conversion into a corporation is extended by one year.

This is the first time that the committee has disclosed plans to extend by one year the effective date of CHC’s privatization, which under the law should have been on July 15.

A Senate bill extending it to Oct. 1, 2011, to coincide with the start of fiscal year 2012 has been pending in the House of Representatives. But Basa said the panel is looking at amending the Senate bill to extend the conversion by one year.

Senate Fiscal Affairs Committee chair Sen. Jovita Taimanao (Ind-Rota) also said her committee has discovered changes or errors in the governor’s budget submission, along with some discrepancies in figures between the Office of Management and Budget and department heads.

Taimanao’s committee has been meeting with different departments on the 2012 budget.

Basa also said the governor’s proposed $5 million budget for CHC is not enough even if it is already a corporation by Oct. 1.

“Sad to say, if we were to let CHC go on their own, with the money that we’re proposing to give, it would be outrageously not enough. From their data, this is not including federal funding,” he told Saipan Tribune yesterday.

He said the government cannot just let a big organization such as CHC or the Department of Public Health go on their own “without making sure that we provide the necessary financial support until they are really ready on their own.”

“We are trying to be as realistic as possible. We may give them one year [extension] because we don’t want them to come in six months and say they’re [still] not ready,” Basa added.

Once CHC is fully turned into a corporation and given ample time, it will have the ability to go out and look for financing to address its monthly shortfall.

“They will also have the ability to raise their services, their rate so they can at least break even or be profitable. But at this time, and according to my [analysis] of the organization, they’re really at a loss. They need more clarity as far as when this organization is going to be cut off, to become independent, how they are going to get there,” he added.

The revised fiscal year 2011 budget of $122 million is expected to further go down to $102 million in 2012, said the Fitial administration. This huge drop is mainly because of the removal of appropriation for and revenue from CHC, which was expected to be turned into a corporation this year.

Basa said that CHC projects to generate some $16 million in 2012, based on a monthly average of $1.3 million in revenue. However, CHC’s average monthly spending is $3.1 million.

“So there’s always almost $2 million in shortfall every month,” Basa said.

Basa’s panel has foregone individual budget meetings with agencies except for major departments such as the Department of Public Health.

Basa’s committee will be meeting again with Public Health Secretary Joseph Kevin Villagomez and other health officials on Thursday morning to discuss the privatization issue and the proposed 2012 budget.

Other lawmakers hope that the House and Senate will be able to pass a timely budget to avoid a partial government shutdown.

Senate President Paul Manglona (Ind-Rota) said the Senate will work cooperatively with the House to pass a timely budget.

But while some lawmakers are bracing for further cuts in their monthly operational account, from the current $5,000 to $6,000 to only $3,000 to $4,000 in 2012, Basa said there are no final figures yet.

“We’re looking at $43,000 to $44,000 a year. …That’s just a proposal,” he said.