Gov’t hikes budget for FY2001

Gov. Pedro P. Tenorio handed in yesterday his budget proposal for FY 2001 amounting to $220.6 million to run the government and deliver essential services to the community as he predicted the tourism industry to drive revenues up again for the first time in four years.

The spending package for the next fiscal year represents a 6.7 percent increase in revenues over FY 2000, allowing the administration to augment the budget set aside for education, health and public safety.

According to the chief executive, the upbeat overview on government income is a result of anticipated growth in tourist arrivals as well as in construction activities spurred by implementation of capital improvement projects.

But Mr. Tenorio stressed this projection assumes a stable garment industry with a flat growth in light of fears expressed by apparel companies that orders may decline following the series of negative reports on the sector.

Finance officials have estimated revenue collection to reach $226.2 million — an increase of about $15 million compared with FY 2000 resources of $211 million.

From that amount, $5.6 million will be allotted for payment of bonds secured by the CNMI for its infrastructure needs, while $4.4 million will be strictly used by the Division of Public Lands.

With the $216.2 million available for distribution among the three branches of the government, the governor said preparation of the new budget was a tough challenge for the administration.

Several departments and agencies submitted proposed budget much higher than their current appropriations, reaching to as much as $75.4 million in additional funding request despite lack of cash resources.

Priority programs

But Mr. Tenorio disclosed additional revenues for the next fiscal year have been earmarked to three priority programs, namely the Public School System, and the Departments of Public Health and Public Safety.

DPH will receive the largest increase — 13.3 percent or about $5.2 million over this year’s budget, followed by PSS with 9.9 percent or nearly $4 million, and DPS with a $1.9 million additional funds to bring its spending limit to $14 million.

Public schools, however, still corner the largest share of the pie, with a $40 million to spend for FY 2001. DPH is next with total proposed appropriation of $39 million.

Together, the three agencies will eat up 42 percent of the estimated government resources or $93 million of the budget that is being shared by the executive branch, the Legislature and the judiciary.

“[T]he proposed budget maintains government services at existing levels with only modest increases in a few agencies,” said Mr. Tenorio to presiding officers of the Legislature in a letter attached with the three-volume package.

However, the submission, made yesterday to meet the constitutional requirement, underscored areas in which the government expects to face difficulties in balancing the budget.

Programs like the scholarship, medical referral, overtime pay of the police and fire officers and utilities costs will need additional funds to meet their needs for the entire fiscal year, according to the governor.

“This means funds will need to be reprogrammed from somewhere else, new revenues identified, or critical services curtailed,” said Mr. Tenorio.

On utilities alone, the government has been behind in paying dues to CUC. With only $4 million set aside for 2001, its debt is anticipated to even widen next year.

Deficit

To bring down budget deficit, the administration will continue to implement programs aimed at controlling expenditures, improving government efficiency, revitalizing the economy and supporting legislation to spur development on the island.

The proposed package has not set aside specific amount to retire the deficit which at present stands at $70 million, but Mr. Tenorio said they hope to appropriate funds if revenue collections further improve.

In the meantime, his administration is optimistic on putting the financial condition in stable shape by next year when various CIP projects amounting to $115 million begin to help stir the economy.

Mr. Tenorio also expressed confidence that ongoing programs touting economic development and intended to entice investors will bear fruit, such as those private sector-led initiatives and education-based programs.

“With passage of appropriate legislation we can attract new business to Saipan, Rota and Tinian and help expand existing businesses,” he explained.

“The result will be an improved business climate which will result in additional revenues, and a stronger, better CNMI community for all our people. This will come from joint cooperative partnerships between the public and private sectors,” added the governor.

Under the Constitution, the Legislature has until September 30 this year to pass the FY 2001 spending proposal, although the current budget has yet to be approved by the Senate after the lower house passed it halfway through the fiscal year.