Budget panel advised vs using $1.5M labor fees

Budget panel members were advised to refrain from using the administration’s additional $1.5 million revenues out of the increased fees for nonresident workers due to “a legal question” involving the fee increase.

“[House] legal counsel [Joe Bermudes] said it’s not a wise decision to consider that funding at this time because it will be challenged in court. There is a legal question involved here,” said House conference committee member Rep. Justo Quitugua.

He said that information reaching the House indicated that the Saipan Chamber of Commerce would file a case challenging the $50 fee increase for nonresident labor application, which the Department of Labor had implemented effective last July.

Quitugua said the business group questions whether the $50 increase is a fee or a tax.

The Department of Labor earlier amended its rules and regulations, resulting in the imposition of the additional $50 (from the original proposal of $100) for nonresident workers’ permit registration.

From the $225 fee for each worker, the department raised it to $275.

Quitugua said the committee was informed that the $225 figure was legislated, so any increase or decrease in the fee would require the Legislature’s approval.

“If it’s tax, then only the Legislature can approve that. In this case, the department raised the amount without legislative approval,” he said.

Bermudes used to work as legal counsel for DOL.

Quitugua said that he would have favored giving the $1.5 million entirely to the Public School System.

The House earlier approved over $38 million for PSS but the Senate reduced it to keep it at the current level of $37.2 million.

“What I wanted was to appropriate it for PSS but it may no longer be the case if this amount would be in question,” he said.

Earlier, Sen. Joseph Mendiola, chair of the Senate Fiscal Affairs, said that he also favors the allocation of the additional funding to PSS. The administration had requested $42 million for the school system.

PSS said it urgently needs funding for school repair, new classrooms, buses, and other classroom supplies.

Quitugua said the conference committee has begun drafting a final version of the 2005 proposed budget. Both Houses went to conference after they approved different funding levels for FY 2005.

The House rejected the administration’s $13 million Fiscal Integrated Plan and approved only $212.7 million appropriation for the current fiscal year. The Senate factored in a new budget projection of $5.1 million and raised the budget level to $217.7 million.

The administration said it would collect additional $5.1 million as a result of the recent enactment of the amnesty tax and tax enhancement laws.