FY06 budget proposal ‘very unrealistic’

The opposition yesterday described the Babauta administration’s $225.8-million budget proposal for fiscal year 2006 as “overly optimistic and unrealistic,” and something that the House leadership is inclined to reject.

“We don’t view it as realistic. The figures are very similar to the FY 2005 projection of $226 million. If we didn’t agree with $226 million for 2005, we certainly would not agree to $225.8 for FY 2006 when we’re expecting revenues from the garment industry to decline,” said House leadership spokesman Charles Reyes Jr.

The lower chamber, led by Speaker Benigno R. Fitial, rejected last year the administration’s $13-million Integrated Fiscal Plan, which was part of the $226-million budget package. The House only endorsed a $213 million budget level.

Although this was later raised to $217 million in the conference committee, the budget plan was eventually vetoed by Gov. Juan N. Babauta, resulting in the government continuing to operate on a continuing resolution.

Reyes said that it is also unrealistic for the government to expect to get more revenues if taxes are raised—as the administration proposes this time.

Reyes noted that the FY06 budget proposal “singles out” the poker industry for significant tax increases.

He said that in general principle, the House leadership has always been opposed and continues to be opposed to tax increases.

The administration proposes to raise the poker license fees by $6,000 and divert all available funds from Tobacco Control Fund, Tobacco Settlement Fund, as well as local poker fees entirely to the General Fund to be able to finance government operations in FY 2006.

“We’re suspicious. We think there may more taxes, hidden taxes that would come up later,” said Reyes.

The Executive Branch submitted its spending plan to the Legislature yesterday, amounting to $225,885,346—nearly $20 million more than the continuing resolution level.

Almost 50 percent of the proposed budget, $106.9 million, would go to four agencies: Public School System, Department of Public Health, Department of Public Safety, and the Department of Corrections.

Management and Budget director Ed Tenorio said PSS would get its total requested amount of $50 million, which is 34 percent increase than its present funding level. DPH, he said, is given $40.2 million, which is 9-percent increase over its current funding. DPS would get $11 million or 6 percent more than its current budget.

Likewise, the FY06 budget identifies $4.9 million for the newly created Department of Corrections.

Tenorio said DOC’s budget is really not sufficient for its operations but it can at least cover the initial work.