Palacios explains vetoed parts of the budget bill for Tinian, others

Gov. Arnold I. Palacios has disapproved a provision in the 2024 budget bill that would transfer 24 positions under the Tinian and Aguiguan Mayor’s Office and their American Rescue Plan Act funding to the Commonwealth Treasury.

The Tinian and Aguiguan Mayor’s Office retains the option of keeping the 24 NOPs and funding them directly under its ARPA funds, said Palacios Saturday in explaining to the Legislature the vetoed parts of the budget bill.

In his letter to the Legislature, Palacios said his budget proposal for the Tinian and Aguiguan Mayor’s Office was formulated based on the cash availability received from ARPA, which was confirmed by Mayor Edwin P. Aldan. He said the same method was applied to the Saipan and Northern Islands after confirming their ARPA cash availability.

“This methodology is consistent with the Planning and Budgeting Act, which requires the formulation of the Commonwealth budget by taking into account all revenue resources available,” the governor said.

Discussions and deliberations on the budget for Tinian were intense in the House, Senate, and conference committee during the budget process.

Palacios also disapproved a subsection in Section 707 of the budget bill that would transfer $531,277 from the Tinian Municipal Treasury to the Commonwealth government to partially fund the salaries of the 24 employees under the Tinian and Aguiguan Mayor’s Office who are not fully funded in the budget bill, provided that the Tinian Municipal Treasury transfers each month the required two biweekly payments for the 24 employees. The disapproved subsection also states that the Municipal Treasury shall provide a list of the 24 affected employees.

Palacios also disapproved Section 203 that would require the Finance secretary to issue financial reports, saying the secretary does not have the final records for the Public School System, the Commonwealth Healthcare Corp., Northern Marianas College, and the Marianas Visitors Authority.

That subjection would have required the Finance secretary to submit in fiscal year 2024 financial records covering all quarterly allotments for all local and federal funds for PSS, Department of Labor for Contract Workers fees, Northern Marianas Technical Institute, CHCC, NMC, and MVA to the Legislature, chairperson of the Senate Committee on Fiscal Affairs, and the chairperson of the House Committee on Ways and Means.

Palacios said the Legislature should directly request the autonomous agencies and public corporations to provide the information relating to quarterly allotments for all local and federal funds.

The governor said the Department of Labor’s Contract Workers fee records will be included in the fund status report requirements in Section 801 of the budget bill.

On Section 601 referring to utilities, Palacios disapproved a subsection as he emphasized that, although he has been given 100% reprogramming authority over the appropriation for the Executive Branch, the stark reality of the budget bill severely limits what he can chip off the skeleton appropriation to close the budget gap for all under-appropriated programs, including the underfunded utilities expenditure for the Executive Branch departments and agencies.

The disapproved subsection states that, except for the Judiciary and Legislature, all utilities, including that of the municipalities of Rota, Tinian, Saipan, and the Northern Islands shall be paid by the central government.

The subsection also further states that any shortfall of utility payments of the Judiciary and Legislature shall be paid by the central government.

The governor said he is left with no alternative but to disapprove the provisions that would strap onto the already underfunded Executive Branch utilities account, the additional obligation to cover any budget shortfall for the utilities of the Judiciary and Legislature, and the municipal governments.

“The budget process as designed by Commonwealth law provides for a realistic and rational approach to financing the operational needs of the government with adequate resources. Section 601 is wholly incompatible with that approach,” he said.

Palacios reminded the Legislature that the timely payment of the government’s use of CUC utility services is being monitored by the U.S. District Court for the NMI in the U.S. against CUC and Commonwealth case.

Although the central government’s past due account has been significantly reduced, the Judiciary still has a substantial past due amount, he said.

The governor noted that CHCC, a public corporation, has a staggering $57 million past due for CUC utility services that must be addressed collaboratively with CHCC to settle the outstanding balance.

The other disapproved provisions or parts pertain to the management of funds, legal holidays, excepted service employee, reduction of work hours, Judiciary advance allotment, other programs requirements, reporting requirements, additional penalties and sanctions, and outside sources.

Gov. Arnold I. Palacios