House poised to scrap gov’t. housing perks

The House of Representatives yesterday moved closer to voting on a proposal scrapping housing benefits to all public sector employees, including those recruited from the mainland, in efforts to reduce expenditures of the government by at least $2 million annually.

Offered by Senate Vice President Thomas P. Villagomez, the initial bill was overhauled by the House committee on Judiciary and Governmental Operations which removed a separate proposal imposing salary caps.

In its report adopted by the House at yesterday’s session, the committee said the housing benefits granted to some government employees is “unnecessary, costly, discriminatory and subject to abuse.”

The existing laws stipulating subsidized and free housing or housing allowance to select employees , mostly off-island hires, must be repealed, according to the report, citing it as “very generous” as compared with other governments.

Although lawmakers acknowledged that the housing package is being used by the government to attract professionals from abroad to work on the island, they maintained it is discriminating against local employees who are as qualified as they are.

Presently, the island government provides between $7,000 to $10,000 per annum to each employee receiving the housing benefits, costing the government up to $2 million every year.

“This money should be diverted to needier programs in education, health and safety,” the committee said in its review of Senate Bill 11-61 which passed the upper house last year.

It is also discriminatory for employees hired on the island who are not given the same benefits compared to the off-island recruits and who must pay their own housing from their own basic salary.

The proposal “will put an end to the discrimination and abuse of the present housing policy by eliminating housing benefits to all employees working in the CNMI regardless of point of hire,” according to the JGO recommendation.

The legislative action comes on the heels of dwindling revenues of the government as a result of the prolonged economic crisis confronting the Northern Marianas.

Legal problems: But the measure drew constitutional question following debate on a provision that will allow the Commonwealth government to charge rental at a fair market value for its homestead units.

Rep. Heinz Hofschneider said income from the rent should go to the Division of Public Lands and not to the general funds as proposed by the House panel.

“If the intention for the Commonwealth government is to start charging rental at a fair market value so long as public lands has not designated this properties on which these facilities on, then the income derived still appropriately belongs to public lands,” he said after the session.

According to the representative, he would consider amendment to the bill once it goes out to the floor for voting to address the legal question resulting from use of government housing facilities.

“I am going to take a look at whether these properties have been designated over to the executive branch,” Hofschneider explained, “and if it is… and the existing law mandates that all housing be charged rent at fair market value, then we must amend it.”

While only few housing units collect rent, particularly in Capitol Hills and Navy Hill, the legislator said this practice could pose a problem “if it is not designated appropriately to those respective agencies” that provide them to their employees.

He also warned that removing the benefits may impact on the Department of Public Health that has relied heavily on medical staff, such as doctors, recruited from North America since they offer this package to lure them into working at the local hospital.

“If you look at the fair market value of residential housing in the Commonwealth, particularly on Saipan and you take the difference of what it costs to operate the government housing, you will find that it costs more to rent a house or an apartment in the private sector,” he said.

“If you remove that part from the benefit package, then we have to be aware that when the DPH requests for an appropriation, they may in fact request an additional level of funding to offset any amount of salary increase.”