‘Stop more govt spending to avoid deficit’

To arrest a possible budget deficit within the fiscal year, a senator called on the Executive Branch “to stop more spending.”

“If you spend more than [what] you’re collecting, you have a problem. We’re creating our own problem. I thought we’re mandated to live within our means. To have spending beyond our collection is saying, ‘Okay, we can do a deficit for the government,’” said Sen. Joseph M. Mendiola, who chairs the Committee on Fiscal Affairs.

“The solution? You just stop spending more than you’re collecting—[a] very simple formula. If we have no resources, then we can’t spend unless we want to run on a deficit, which is against the Constitution,” said the senator.

In his recent letter to the Legislature, Gov. Juan N. Babauta said that General Fund expenditures for the current fiscal year has already reached $150 million, while revenue collections only amounted to $139 million as of May 31.

The governor said the revenues reflected a $6 million increase from last year’s figure.

Babauta said the government realized a $150 million spending due to recovery efforts made after two major typhoons last year; overtime for Department of Public Safety personnel; direct hiring of nurses at the Commonwealth Health Center; decrease in garment revenues; and advance payments to the cash-strapped Commonwealth Utilities Corp.

He said this happened “while still implementing spending control measures.”

Meantime, Mendiola said that the governor’s certification of $206 million in available resources for fiscal year 2006 calls for more budget cuts.

“There’s no argument about cutting now. It’s just a matter of where we cut,” he said.

The governor, meantime, reiterated his call for the Legislature to pass the FY 2006 budget on time, which is on or before Sept. 30 this year.

The Babauta administration submitted a $226-million budget proposal for FY 2006, which contains $20 million worth of revenue generating measures. These include the proposed $6,000 increase in poker fees and suspension of appropriation of tobacco funds.

“Let’s work together and use the remaining three months to adopt a sound fiscal year before the beginning of FY 2006 so that it will meet the needs of the public in the coming year,” said Babauta in a July 1 letter to the Legislature.

Mendiola said that, if he had his way, the budget for FY 2006 should have been finished by now.

“I’m very disappointed at what’s happening because the House is not doing it fast. The budget proposal has been with them since April 1, but up to now, nothing is happening. We are way beyond schedule,” said Mendiola.

House Ways and Means Committee chair Norman S. Palacios said that there is no deadline for passing the budget.

“There’s no deadline for that but it would be nice if we have it by September,” he said.

He said his panel is now poised to introduce a $206 million for FY 2006.

“Now that we’ve got this certification from the administration, we’ll go ahead and introduce this [budget bill] of $206 million,” said Palacios.