Budget panel to allocate $5.1M to retro pay, within-grade increases

Members of the conference committee tackling the 2005 budget have agreed to use the projected $5.1 million in additional revenue to pay off retroactive salaries and within-grade increases of government employees.

Rep. Jesus Attao, a member of the joint budget panel, said during Wednesday’s session that they decided to allocate the projected revenues for the unfunded liabilities.

“That’s the agreement: to use the $5.1 million to pay for the within-grade [increase] and retroactive salaries. So that funding has already been reserved,” he said, following suggestions from other House members that the projected income be tapped to pay the government’s outstanding debt with the Commonwealth Utilities Corp.

As agreed on by the panel, $1 million of the amount would be used to pay for Tinian and Rota government employees’ retroactive pay. The remaining amount would be reserved for the within-grade increase.

The Babauta administration had initially submitted a proposed $226 million spending plan for fiscal year 2005. It later submitted additional funding of $5.1 million that it expects to raise from two revenue enhancement measures that were recently passed into law. This is the money that the joint panel wants to go to the retroactive and within-grade increases.

Rep. Arnold I. Palacios explained that the within-grade increase is not a new salary hike but a debt that needs to be paid now. He said the within-grade increase has been suspended for all government employees except the nurses and police personnel.

“It’s not a new wage increase. It’s been suspended for several years now for lack of government funds. We’re paying what’s due them [government employees],” said Palacios.

Meanwhile, the conference committee has agreed to use the $217-million funding level for fiscal year 2005 as approved by the Senate, in view of the additional $5.1 million in anticipated revenues.

The House earlier approved only $212.7 million out of the $226 million requested by the administration. The House had rejected the administration’s Integrated Fiscal Plan, which aims to generate some $13 million from increased fees and taxes.

Meantime, the joint committee has asked the Attorney General’s Office to explain the nature of the projected $1.5 million revenues that the administration expects to raise from the $50 increase in labor fee for nonresident workers.

The committee said it would not be able to consider the additional projection because it is unclear whether it is a fee or a tax.

The Department of Labor implemented the $50 hike last July, increasing the legislated labor fee of $225 without legislative approval to $275.