Wage cut bills met with wide opposition

Government employees, including ranking officials, spoke loud and clear Wednesday against bills that would cut their salaries by 10 percent across the board.

In a four-hour public hearing, civil service members and other employees made their case against the wage cut proposal and urged the lawmakers to consider other options before dipping into their paychecks.

They also raised concerns about the multiplier effect that could result from a government pay reduction.

The joint public hearing was held by the Senate Committee on Fiscal Affairs and the House Ways and Means Committee at the Multi-Purpose Center Wednesday night. The bills discussed were House Bill 15-115, Senate Bill 15-40, and the latter’s amended version, all of which seek to reduce personnel spending by cutting wages.

The public hearing began at 6:30pm with a presentation by Finance Secretary Eloy Inos and special assistant for management and budget Antonio Muna.

Inos discussed the government’s current financial condition, including the $155-million cumulative unreserved deficit, the $15-million reduction in revenue estimate for fiscal year 2006, and $50-million projected shortfall by the end of FY2006.

For his part, Muna reported that the administration had already cut government spending from a monthly average of $19.2 million in the first four months of FY2006, to $16.8 million in February and March 2006. He said that the government needed to further reduce its spending to $14.6 million to prevent a deficit at the end of the fiscal year.

He also talked about several options being considered to eliminate the deficit. He said the Executive Branch could delay payment of employer contribution to the Retirement Fund, tap the deficit reserve account, and “as a last resort” cut government wages.

But most of the participants in the public hearing did not seem convinced.

Board of Education member Margie Lee Taitano conveyed the Public School System’s request that PSS personnel be exempted from the wage cuts. She said a pay reduction could cause PSS to lose teachers.

NMI Humanities Council executive director Paz Younis described the proposal as “a band-aid solution” and a punishment to government workers.

PSS finance director Richard Waldo cautioned the lawmakers about the adverse economic effects that could result from cutting the purchasing power of government employees.

Gonzalo Santos, director of the Indigenous Affairs Office, made his statement by coming to the public hearing in a shirt and short pants, rather than the business attire required of government officials and employees. “I dressed this way to make a statement: I cannot afford a salary cut,” he said.

Commonwealth Election Commission executive director Gregorio Sablan made a case on behalf of his staff members, who he said were already overworked and underpaid. He cited the specific circumstances of his employees and related how a cut on their below-$20,000 annual salary could significantly harm their daily lives.

John Davis, a teacher, said the wage cut plan was “poorly thought out.” He also questioned the move to enact a new wage law, saying that there was an existing statute giving the governor the authority to reduce government wages.

Vicenta Quitugua, a full-time college student, single mother and government employee earning $15,000 a year, asked the lawmakers to consider their proposal’s potential effect on families.

Joseph M. Mendiola, a special project coordinator at the Department of Public Works, was one of the few who expressed support for the wage cuts. He said he was willing to accept a $15,000 cut on his annual salary of $40,000. “I want that $15,000 to go to somebody who can be hired [by the government],” he said.

Edward Diaz, a retiree, expressed no objections to cutting government wages, as long as all employees are affected. He said the amended version of S.B. 15-40, which provided for numerous exemptions, was “downright unfair and discriminatory.”

In response to the opposition, press secretary Charles P. Reyes Jr. said yesterday that: “We simply don’t have enough money to maintain the existing payroll liabilities.”