FY 2000 budget may not be approved this year

Despite attempts to push the FY 2000 budget approval, the Legislature will likely not pass the much-delayed spending proposal anytime soon following concerns on some provisions setting aside surplus funds from personnel for salary increase of government employees.

The administration has reportedly opposed the plan contained in the budget bill due to the continuous financial difficulties confronting the CNMI. The House of Representatives is expected to discuss the proposal in a session scheduled for today if there are at least 14 members attending.

House Ways and Means Committee Chairman Karl T. Reyes said that such provisions will mean that any lapse funds from personnel budget can be used only for salary hike and not for other critical programs, such as scholarship and medical referral.

“If this is going to cause so much of a problem, it’s better that we don’t pass the budget and just go on under the continuing resolution [of 1999 spending level],” he told in an interview yesterday.

The representative also maintained it could lead to more people entering the public sector, while those already on board will not leave their government jobs and try to keep them longer before retiring.

“The higher the increase in salary, the more they want to stay in the government. They wouldn’t want to retire,” said Mr. Reyes.

House members inserted the provisions in the budget measure in efforts to comply with a seven-year old law that stipulates an across-the-board salary adjustments amounting to about five percent every year.

Retroactive

Under the proposal, the hike will be retroactive and will be paid through appropriation of the lapsed funds from personnel expenditures, such as those savings from positions left vacant by the government even though they are budgeted.

According to Mr. Reyes, the plan will cost the government $4 to $5 million every year and if it is made retroactive, up to $30 million will be needed to pay off its obligations.

“It is a concern that the administration has as to where we are going to get the money and it is a priority based on the budget proposal,” he explained, adding the first $3 million realized from the surplus will be specifically allocated for the pay hike.

There are no estimates how much the government expects to save from unfilled positions, but Mr. Reyes disclosed that surplus funds in the past have been used to meet shortfall in operations, including scholarship. medical referral and utilities payment.

He said that with seven years down the line, the local coffers will have to raise at least $28 million just to comply with the law. “When are we going to satisfy this when other programs need funding?” asked the representative.

Gov. Pedro P. Tenorio has proposed a spending level of close to $207 million for FY 2000, on top of over $4 million estimated revenues that will be set aside exclusively for public lands needs.

Legislative approval of the budget package, however, has ran roughshod in the wake of disagreement among members of both chambers on how to distribute the meager resources which represent a two percent drop from FY 99 level.

Last September, the House and the administration agreed to adopt the continuing resolution based on the $210 million budget from previous year pending further review of the proposal.

The Senate is also expected to amend the budget bill once it passes the House to raise the amount given to scholarship and medical programs by slashing funding for housing allowance and computer hardware upgrade as well as closure of CNMI’s liaison office in Manila.