Senate, House pass budget bill

As expected, the Senate and House of Representatives passed during emergency sessions yesterday a 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 budget bill, or the Fiscal Year 2024 Appropriation Act, is now on Gov. Arnold I. Palacios’ desk for action after House clerk Linda B. Muna handed a copy of the legislation to Amelia Shai, the special assistant for Programs and Legislative Review, yesterday at 3:45pm in Muna’s office.

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

Nineteen House members voted “yes” and Rep. Thomas John DLC. Manglona (R-Saipan) abstained from voting to a motion to adopt the bicameral conference committee’s report that recommends for the passage of the budget legislation—House Bill No. 23-66, House Substitute 1, Senate Substitute 2, Conference Committee Substitute 1.

All nine senators unanimously voted “yes” to adopt the bicameral conference committee’s report.

House Speaker Edmund S. Villagomez (Ind-Saipan) thanked the conferees and staff from both the House and the Senate “for their hard work.”

Before the voting took place in the Senate, Senate President Edith E. DeLeon Guerrero (D-Saipan) extended her appreciation to the Senate and House conferees and also for their alternates as they sit in as well during the deliberations for the fiscal year 2024 budget product.

DeLeon Guerrero said a lot of the contentious issues were discussed that afternoon regarding the budget product.

“At the end of the day, it’s quite unfortunate that the government employees have to face the cuts as a result of the lack of revenue,” she said.

The Senate president said she is hopeful that moving forward that this collective Legislature start looking at putting in revenue generating legislation on a timely fashion and not at the last minute when fiscal year 2024 is already knocking on their doors.

DeLeon Guerrero underscored the need to look at economic initiatives as they hope to look to receive some of that plan of action from the administration.

She said there’s a lot of conversation about pivoting for military tourism, but people have yet to see any revenue studies being done for this particular industry as they speak today.

“It has been happening here in our region. But we have not seen an official report of how much revenue has been generated from this particular tourism and how much collection of revenues has been generated as a result of the buildup, which is right next door. And also what is the spillover for Saipan and Rota as well,” the president said.

She said there is a need to take a look and work hard in trying to identify how to improve the CNMI destination in conjunction working with the Marianas Visitors Authority and all other stakeholders to bring in more tourists so that the Commonwealth can become a much more competitive market.

“All of these things are the responsibility of the government. Collectively, again, it is our responsibility,” DeLeon Guerrero pointed out.

She said it’s just quite unfortunate that the working population or government employees have to bear the brunt of reduction of hours in order for the Legislature to fill the gap of certain programs that are lacking revenue in order for them to move forward.

She said the Group Health Life Insurance is a serious matter as it affects the people’s lives.

She said she does hear that death benefits are on hold because premium payments from the employer sponsored responsibility is behind three or four payments.

“This is not the time for us to wait for the next fiscal year to come in and start thinking about what revenue shall we legislate and where does it begin, which we know where,” DeLeon Guerrero said.

She said hopefully they don’t see much veto on this particular product because it took a lot of time and effort to work on.

Before the voting in the House and Senate, Rep. Ralph N. Yumul (Ind-Saipan), who chairs the House conference committee, and Sen. Donald M. Manglona (Ind-Rota), who chairs the Senate conference committee, both discussed the history of the budget bill.

Yumul said there was a difference in the amount of $1.1 million on available for appropriation between the House and the Senate.

He said what the Senate had done was reduce the share of the Public School System by $292,000, reduce the Saipan Mayor’s Office share by $690,00, and reduce Medicaid local matching by $185,000.

Yumul said this was done to make up for the difference and also to fund the shortage of approximately $1.7 million to cover the number of personnel (NOP) for the Second Senatorial District, or Tinian and Aguiguan.

He said the Senate and the House versions had a difference of $2.18 million that was taken out of certain budgetary provisions so they can provide fund for the shortages.

Yumul said the House and the Senate met for the last four days and compromised and had agreed to fund the Second Senatorial District as well as the Saipan Mayor’s Office, provided that revenue-generating bills were to be approved by both houses.

He said a total of nine provisions were agreed upon and they started out at Section 501 in the bill, which is the reprogramming authority for agencies, departments, and so forth.

“As we moved along to Section 601, we agreed on provisions for utilities,” he said.

Under 604 Section, Yumul said, they amended and agreed upon the revolving fund to make it more flexible for both the Judicial and all the agencies that have revolving funds.

Under 605 Section legal holidays, he said they agreed that two additional hours will be reduced provided that the government continues to open its doors.

“We understand that there are additional five holidays that we removed in order to satisfy and to eliminate a lot of the additional work hour cut. We just spread throughout the year,” he said.

Under Section 607, Yumul said they had a provision for the Marpi Landfill No. 1 cell closure, which is the financial assurance mechanism, because they removed the revolving fund for solid waste.

He said they were asked to provide a provision that in case the landfill were to close down, the CNMI government would be able to cover the closure.

Under Section 608, Yumul said they had a provision and that’s the reduction of work hours.

He said the conferees agreed that additional language was necessary to ensure that hours deducted, the austerity will not affect earnings, annual sick leave, and other benefits for government employees.

On Section 703, the Judicial Branch, he said the conferees agreed that any outside source funds, the Judicial branch may also be able to use that to restore back their work hours.

On Section 704, Yumul said the same provision was given to the Legislative Branch and the LB director has the authority to adjust the hours so they don’t close.

Yumul said they also added a provision to the Second Senatorial District with the additional NOP to be funded.

Yumul asked House members to support this version of the conference committee as both houses agreed and so that they will avoid government shutdown.

Rep. Thomas John DLC Manglona (Ind-Rota) said he has not had proper time to review the entire budget in its entirety and that he still has some questions.

“I understand we’re pressed for time so I do not expect all my questions to be answered within the session. So, I respectfully, if it is a possibility, my clear conscience I want to abstain from voting,” Manglona said.

Manglona said he feels like he cannot make a clear decision with everything that has happened these past few weeks in his personal life, and that he has not had the proper time to review the conference committee’s report.

Rep. Blas Jonathan T. Attao (Ind-Saipan), who is the vice chair of the House conference committee, said there’s a lot of work that was done and they’re pretty satisfied that a lot of the revenue-generating measures that have been presented by the House.

Attao said some of the revenue generating measures, which are sitting in the Senate already, are going to see the light of day so their actions are going to be taken so they can get them to the governor’s desk.

He said one of the things that he believes they need to set for that day’s session is that future revenue generating measures that they are coming up with, shall be to satisfy the general funds.

Attao said it is needed so there is flexibility for the administration to move funds whether it’s a Group Life Insurance, Medicaid, reimbursements, the retirees’ 25% pension payments, or any other obligation that’s owed to vendors or other entities that have negotiating agreements already with the executive branch.

Rep. Patrick H. San Nicolas (R-Tinian) thanked the Senate and House conferees for these time-consuming efforts that they’re trying to come up with a final product to satisfy the departments, all agencies, and all employees across the Commonwealth.

Before the voting, Sen. Donald M. Manglona also answered all the questions and concerns on the bill raised by Sens. Paul A. Manglona (Ind-Rota), Francisco Q. Cruz (R-Tinian), Jude U. Hofschneider (R-Tinian), and Dennis James C. Mendiola (R-Rota).