Bicameral conference committee adopts budget bill for FY 2024

After several days of deliberations, the bicameral conference committee adopted last Saturday a mutually agreed budget bill that identified $163.4 million as the total budgetary resources and $114.2 million as the total local revenue and resources available for appropriation for the CNMI government’s operations in fiscal year 2024.

The full Senate and House of Representatives are expected to adopt today, Monday, the conference committee’s final product, House Bill No. 23-66, House Substitute 1, Senate Substitute 2, Conference Committee Substitute 1. The adoption basically means the Legislature passes the budget bill or the Fiscal Year 2024 Appropriation Act, and it will be submitted to the governor’s desk for action.

Without a balanced budget enacted into law by Oct. 1, 2023, there will be a partial shutdown of the government’s operations.

House Speaker Edmund S. Villagomez (Ind-Saipan) on Saturday called for an emergency session in the House chamber today, Monday, at 10am, to take action on the conference committee’s final product.

Senate President Edith E. DeLeon Guerrero (D-Saipan) said yesterday that the Senate’s emergency session will be today, Monday, at 3pm.

Villagomez and DeLeon Guerrero formed a conference committee after the House rejected last Sept. 15 the Senate’s version of the budget legislation.

The conference committee began their meeting in the House chamber last Sept. 19. They deliberated for several days until they reached a mutually agreed final product on Saturday.

The conferees adopted the final product on Friday, but the following day, they made further amendments and subsequently voted again to adopt the final product.

During Saturday’s meeting, Rep. Ralph N. Yumul (Ind-Saipan), who chairs the House conference committee, thanked his committee members and the Senate committee for a “somewhat smooth” process.

“It can be a little bit contentious but you know, that’s just part of the process. I’d like to thank everyone that’s here on Saturday,” Yumul said.

Sen. Donald M. Manglona (Ind-Rota), who chairs the Senate conference committee, said the Senate conferees also share the same sentiments. He thanked the Senate and House conferees and all the Legislative staff who assisted them in getting the final product.

“We’re at a crossroads in certain parts of the bill, but we are able to resolve that with understanding that now we have revenue legislations in both houses that we can push through to address some of the many issues that were not addressed in this budget,” Manglona said.

Manglona, who presided over the conference committee meetings, said they hope that with the passage of those bills that could resolve a lot of underfunded activities that could not be addressed in this round.

“And so we hope that additional future legislations will allow for all employees to go back into 80 hours or whatever hours we can restore would greatly help our people,” he said.

On the debated donation of sick leave issue, the conferees agreed to the Senate version that added a new Section 403 of the bill.

The new section states that “when an employee volunteers to donate sick leave, the donated sick leave shall be based on the donor’s current base hourly salary and shall be converted into equivalent sick leave hours based on the recipient’s current base hourly salary. Provided that the donated sick leave hours shall not exceed 1,040 hours.”

On reprogramming authority, the conferees agreed on the Senate version that reads “the governor shall have 100% reprogramming authority for the departments, agencies, and offices of the executive branch, provided that the municipal entities shall not be subject to this reprogramming authority without the consent of the mayor.”

The Senate version also states that “the reprogramming authority shall not apply to Section 604 of this Act.”

Section 604 refers to revolving accounts.

The Senate version also further states that “reprogramming shall not be used for hiring of personnel or salary adjustment of active personnel.”

The authority to reprogram shall not apply to the funds appropriated to the legislative and judicial branches as well as to those funds appropriated by the respective legislative delegations.

Pertaining to utilities, the conferees agreed to amend the House version and accept the Senate version that added a new subsection.

The bill now states that “except as provided in subsection (c), the Commonwealth Utilities Corp. monthly utility billings for all departments and agencies shall be paid by the central government after all the funds in the general revolving accounts are exhausted.”

Subsection (c) states that “except for the judicial branch and legislative branch, all utilities, including the municipalities of Rota, Tinian, Saipan, and the Northern Islands, shall be paid by the central government. Provided that any shortfall of utility payments of the judicial branch and legislative branch shall be paid by the central government.”

On legal holidays, the conferees agreed that any employee required to work on a non-federal Commonwealth legal holiday shall be paid at the basic salary rate for the hours worked on that day without any additional adjustment for holiday leave with pay.

The conferees agreed that any employee whose salary is partially or fully paid by federal funds shall receive leave with pay for legal holidays.

In order to reach a consensus and not suspend more than five legal holidays, the conferees agreed to jointly push forward with tax bills because at this point, there is no other stream of revenue that can address the governments revenue shortfall except for tax hikes.

The conferees agreed to support tobacco tax increase, sugar sweetened beverage tax, container tax, betel nut tax, and pending further review of its language, the construction tax.

The conferees anticipate to pass most, if not all such taxes, to address the shortfall in Medicaid and Group Health Life Insurance and more importantly to prevent further reducing the work hours of government employees.

The conferees agreed that an additional two-hour reduction spread throughout the fiscal year will make adjusting to this additional cut easier on government employees.

Therefore, the conferees agreed that government employees will be paid on holidays because two additional hours will be added to the already existing eight-hour reduction for a combined total of 10 austerity hours per pay period.

On the landfill issue, the conferees agreed that in the event of any funding shortfalls caused by this budget legislation the CNMI government shall be fully responsible for all costs and expenses, not to exceed $5.4 million, that are necessary to effectuate the closure of cell number 1 of the Marpi landfill.

The language was requested and approved by Department of Public Works Secretary Ray N. Yumul on Friday to provide for a financial assurance mechanism needed since the Solid Waste Earmark was suspended.

On work hours, the conferees agreed that during fiscal year 2024, a full pay period for purpose of earning annual leave, sick leave, or other benefits, shall be 80 hours less the amount of hours deducted via austerity measures.

The conferees agreed that this provision shall not apply to first responders and law enforcement personnel, whose normal work exceeds 80 hours per pay period.

With respect to judicial branch, the conferees agreed that the CNMI Supreme Court chief justice and the Superior Court presiding judge may adjust the judicial branch work schedule and operating hours that are consistent with available funds for personnel and operations.

The chief justice and the presiding judge may use any available outside source funds, including revolving accounts, to restore the reduced work hours of the judicial branch personnel.

Regarding the legislative branch, the conferees agreed that the Legislative Bureau director may adjust the legislative branch work schedule and operating hours that are consistent with available funds for personnel and operations.

The Legislative Bureau director pay use any available outside source funds to restore the reduced work hours of the LB personnel.

With respect to First Senatorial District, the conferees agreed that three number of personnel (NOP) shall be provided to the Rota Customs Services for customs inspector positions.

Upon hiring of these three new positions, the three NOPs under the Office of the Mayor of Rota shall be unfunded and removed.

Pertaining to the Second Senatorial District, the conferees agreed to the Senate version that states that $531,277 shall be transferred from the Tinian Municipal Treasury to the Commonwealth government to partially fund the salaries of the 24 employees under the Tinian Mayor’s Office who are not fully funded in this Act, provided that the Tinian Municipal Treasury transfers each month the required two biweekly payments for the 24 employees.

The Municipal Treasury shall provide a list of the 24 affected employees.

One new NOP shall be funded at $29,551 for a landfill supervisor for the DPW-Tinian.

The conferees agreed that unfunded personnel under Department of Public Safety-Tinian and Department of Fire and Emergency Medical Services-Tinian shall be funded an additional $1 each.

On other programs, the conferees agreed that the inter-island medical referral services shall include stipends, airfare, and lodging for patients and escorts, which is consistent with the off-island medical referral program.

The expenditure authority for all funds appropriated to inter-island and off-island medical referral services and administration, shall be the chief executive officer of the Commonwealth Healthcare Corp. or his or her designee.

The conferees agreed to use the monies under the Active Employees, Health Insurance Employer Contributions business unit to fund the Saipan Mayor’s Office in the amount of $690,904 for their personnel; $100,000 to the Rota Mayor’s Office for their operations; $46,684 to the Division of Customs & Biosecurity for one NOP; $28,773 to the Solid Waste Management Division for one NOP; and $73,025 to the retirees GHLI business unit.