Finance refutes revenue ‘omissions’

The Department of Finance has denied excluding any new revenue for the proposed $225.8-million budget for fiscal year 2006.

“We disagree that the revenue sources you cite are omitted from the FY 2006 budget submission,” said Finance Secretary Fermin M. Atalig in an April 11 response letter to Sen. Joseph Mendiola, chair of the Senate Committee on Fiscal Affairs.

For instance, the secretary said the projected labor fees are included in the Nonresident Worker Fee Fund and Deportation Fund. Last year, the department projected some $1.5 million in revenues from a $50 labor fee increase.

The senator earlier pointed out that the proposed 2006 budget does not include “several revenue sources” identified by the Babauta administration for the current fiscal year.

Considering that the $217.7-million budget for FY 2005 was vetoed, leaving the government to operate on a continuing resolution of $213 million, Mendiola said that some $5 million in available resources should have been included in the FY 2006 proposed appropriation.

The administration submitted last week a $225.8-million budget plan for FY 2006, identifying $206 million in “available resources” and some $19 million in “additional revenues” that would be generated by redirecting Tobacco Funds and increasing by $6,000 the annual poker fee licenses.

“It appears that several revenue sources may have been omitted from the budget package,” Mendiola had said, citing the labor fees, $2.1 million tax amnesty payment, over $3 million from Revenue and Taxation Enhancement Act, and some $2 million share from the sale of Lao Lao Bay Golf Resort.

In his letter, Atalig clarified that the recent receipt of $2 million in government shareholder dividend from UMDA was due to the sale of Marianas Cable Vision, not Lau Lau Bay Golf.

“We’re unaware of the $2 million from the Laulau Bay Golf Resort,” he said.

Atalig further said that the MCV proceeds was a one-time payment “and will not be repeated in FY 2006.”

He said the same would happen with any money from the Lau Lau sale.

As for the tax amnesty, he said “the program will not be in effect in FY 2006 so no revenue will be generated.”

As for the revenue from the taxation and revenue enhancement law, Public Law 14-35, he said these “are incorporated in the estimates for each of the tax categories.”

Mendiola said yesterday, however, that there seems to be some confusion in the presentation of the FY 2006 budget.

“We have to sit down with them and clarify these. They [Finance] should be specific,” he said.

Mendiola said his committee and the House Ways and Means Committee, chaired by Rep. Arnold S. Palacios, are set to hold a joint preliminary discussion on the proposed budget on Friday.

The meeting was initially scheduled yesterday.