Palacios signs budget into law

The CNMI has evaded a government shutdown with Gov. Arnold I. Palacios keeping his promise to timely sign the fiscal year 2025 budget bill into law.

Yesterday, Palacios officially signed into law House Bill 23-115 House Draft 1, House Substitute 1, Senate Substitute 2 (essentially the CNMI’s budget for FY25) with a few vetoes. The bill is now Public Law 23-26 “Appropriations and Budget Authority Act of 2025.”

The signing comes just days after Palacios promised that there would be no government shutdown this coming fiscal year.

“I applaud the Legislature for ensuring the budget for FY25 reached my desk with sufficient time for my review. The goal in this budget it to maintain fiscal stability at a time when resources are scarce, meet government obligations, and ensure public safety and welfare in our community,” he said.

In a statement from the Legislature, although they have yet to review the signed act, they are happy that the budget bill was signed in time to avoid a government shut down.

“I have not seen the official communication yet, but I’m glad that we have a budget and that we do not have to worry about a shutdown,” said House Speaker Edmund Villagomez (Ind-Saipan).

“My office is waiting for its delivery and so I will be reviewing the governor’s message transmittal on the FY’25 budget. I am happy the FY 25 budget is signed into law before midnight which keeps government employees working and government offices continuing its services for the community,” said Senate President Edith DeLeon Guerrero (D-Saipan0.

The act, for the most part, keeps a lot of the same language in H.B. 23-115 HD1, HS1, SS2 with a few vetoes.

“In addition to the foregoing concerns, I have line-item vetoes several parts of the act which I have found unclear, ambiguous, or problematic either in their inconsistency with existing provisions of law, or in their implementation or imposition of additional steps that would hinder efficiency in government operations,” he said.

The vetoes encompass reporting requirements, pay adjustments, the hiring process, allotments to certain agencies, sanctions, and use of certain funds for certain programs,

The act also reflects the offset on utility arrears as agreed upon by the CNMI government and CUC recently, and the over $27.1-million federal funding for the CNMI Medicaid program championed by Delegate Gregorio Kilili Sablan (D-MP).

“In conjunction with other measures in the previous weeks, including the agreements to offset arrears between the Commonwealth Utilities Corp. and the Office of the Public Auditor, as well as federal legislation backed by Delegate Sablan to increase funding for CNMI Medicaid, the FY 2025 budget represents another major step in further stabilizing the Commonwealth’s finances. Going forward, the central government, CUC and CHCC will all be on more robust fiscal footing, allowing the government to maintain essential services, keep current with utilities payments, and facilitate compliance with CUC’s stipulated orders,” said the Office of the Governor in a statement.

Meanwhile, although the Legislature provided Palacios 100% reprogramming authority within the Executive Branch, funding was not identified for the retirees’ 25% benefit. In his transmittal letter to the Legislature, the governor urged the Legislative Branch to prioritize remedying this shortfall.

Lastly, Palacios states that the CNMI government will also be ensuring that the constitutional requirement for Department of Public Lands to remit funds to the Marianas Public Land Trust will be complied with going forward so MPLT can reinvest those monies to assist the Commonwealth’s development.

The governor vetoed the provision of the FY’25 budget bill which failed to abide by this constitutional provision.