‘Legislature’s neglect caused budget lack’

The lack of a new budget up to today—the last day of the fiscal year—is the result of the Legislature’s neglect and not of the Babauta administration, which submitted its budget proposal six months ago, said press secretary Pete A. Callaghan.

Callaghan was reacting to a statement made by Senate minority leader Pete P. Reyes. who earlier blamed the administration for its lack of ability to persuade the lawmaking body to pass a new budget.

Reyes had said that the situation shows that the governor “cannot work with the Legislature.”

“The administration can’t persuade the Legislature enough to let them pass the budget. There’s a lack of working relationship between the governor and the Legislature,” the senator said.

Callaghan laughed off this observation, noting that the Legislature had all the opportunity to pass the budget since April 1, 2005.

“The Legislature has had six months to work on the budget. If they didn’t like the governor’s version, they had six months to propose changes to it and bring it back to the governor. They have not had a single public hearing, they’ve not called a single department head, or a single activity head to justify their spending levels. I think that they’ve just neglected their primary duty to prepare the budget for the Commonwealth,” said Callaghan.

Further, the excuse that it is an election year “is nothing more than a cop-out,” he said.

The administration submitted a $225.8-million budget package for fiscal year 2006, which included revenue enhancement measures that aimed to generate $20 million.

Under the budget proposal, the administration said that it would only be able to collect $206 million by FY 2006 in view of projected reduced revenues from the garment industry. The industry is currently downsizing as a result of the worldwide lifting of trade quotas.

To remedy this, the administration asked the Legislature to raise the poker license fee by $6,000 and divert all tobacco control and settlement funds and local poker funds to the General Fund.

Recently, the House adopted a concurrent resolution identifying only $206 million for FY 2006, thus rejecting the proposed revenue enhancement package. However, House Concurrent Resolution 14-3, which is pending at the Senate, does not constitute a budget bill.

Essentially, the House of Representatives has not finalized drafting a budget bill for FY 2006.

FY 2006 kicks in tomorrow, which means that the CNMI government would automatically run on the continuing resolution level of $213 million until the House comes up with a new budget.

Authorities earlier said that this setup would result in the government incurring a deficit for the next fiscal year.