Proposal may include $200K-$300K for credit union members; Senate finds credit union account down to $28K
Gov. Eloy S. Inos is now preparing for submission to the Legislature a supplemental budget of “$8 million to $9 million,” including $5 million for the annual minimum guaranteed payment to the Retirement Fund settlement fund, the government health and life insurance plan, and possibly “$200,000 to $300,000” to refund members of the Commonwealth Government Employees Credit Union.
Meanwhile, senators yesterday found out from the credit union and the Finance Department that the credit union only has some $28,000 in its account and not $60,000 as previously thought, with some $2 million in unpaid obligations.
The governor made it clear the supplemental budget figures are “preliminary,” and could still change a few times before they get to the Legislature.
Inos acknowledged that this is only “more than half” of what the administration was hoping for, to cover its obligations for fiscal year 2014 ending on Sept. 30.
“I’m putting it together. It’s not going to be enough to take care of [everything] but it’s going to be more than half of that [needed]. It’s probably more like $8 million or $9 million,” the governor told Saipan Tribune.
The preliminary figures do not include those collected during the implementation of the latest tax amnesty program under Public Law 18-29, he said.
Inos said the supplemental budget comes from additional revenues generated mostly from business gross receipt taxes, now that tourism numbers have improved.
Rep. Tony Sablan (Ind-Saipan), chairman of the House Ways and Means Committee, separately said the government expects to collect up to $2.6 million from the latest tax amnesty program, inclusive of at least $446,572.81 that’s actually collected.
Sablan said the rest is expected to be collected on an installment basis.
For the credit union funding, the governor said, “It depends on the numbers worked out.”
“But our intention is to allow for a small amount to take care of that,” he said.
When asked about the range, he said, “Probably $200,000 to $300,000.”
The governor said the supplemental budget he’s preparing covers a portion of the health and life insurance premiums.
“The premiums are paid on a biweekly basis. It’s kind of pay as you go. It would be nice to secure the funds but if we don’t have the funds, we want to make sure we have so much to pay when payment becomes due…” he added.
Senate on credit union
The Senate Fiscal Affairs Committee met yesterday with credit union chair Angel Demapan, Finance Secretary Larrisa Larson, and other officials for an update on the state of the union.
Sen. Jovita Taimanao (Ind-Rota), chair of the Fiscal Affairs Committee, said the Senate would like to help credit union members refund their money while at the same time keeping the credit union stay alive.
Taimanao said the credit union only has $28,000 remaining in its account. She said this is much less than the $60,000 previously reported by the credit union.
“They only have $60,000 but their members’ refund is about $350,000,” Taimanao added.
Senators took turns offering recommendations how to help the credit union members and the credit union itself.
Sen. Paul Manglona (Ind-Rota) brought up the idea of privatizing the credit union.
“But it has to be done through a request for proposal so that we could get the best offer, the best plan,” he said, adding that while the credit union has only $28,000 in its account, it has some $2 million in unpaid obligations including some $1.5 million to the Retirement Fund and some $350,000 owed members.
Sen. Frank Cruz (R-Tinian), for his part, said since the credit union still has over $20,000 left in its account, it should just merge with other departments or agencies such as Finance. He said the credit union only has one employee anyway.
“What about the uncollected loans from those now off island? I think the government should not give them their rebate or refund to offset what they owe. I asked the assistant attorney general, Ms. Patel, if they could review that and see whether it can be done,” Cruz said.
Manglona also asked whether the Office of the Attorney General can review the list of credit union’s past officers and check whether their immediate relatives were able to obtain loans and whether they have been paying their loans.
Taimanao said there are also recommendations to revamp the credit union.
“And it appears there’s only five individuals paying,” she added.
A Senate resolution asks for the refunds of credit union members’ money.
The credit union earlier mulled seeking relief from the Legislature so it could fulfill its unpaid obligation to members.
Refunds of the members’ contributions were suspended after the administration decided to do an audit to determine the financial status of the organization.
The credit union has delinquent loans totaling about $575,000, it said earlier.