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Spending over revenue projection not the answer
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Posted on Jul 28 2005
Babauta took charge of the CUC in May 2005 and then told the Legislature on July 13 that, if they would approve appropriations for CUC’s fuel costs, then the administration would be willing to approve the bill that aims to repeal the fuel surcharge of 3.5 cents per kilowatt hour. Babauta gave the Legislature a deadline of July 29 for his proposal.
Babauta’s proposal placed the onus on the members of the Legislature to resolve the serious fiscal problem that stemmed from the government not paying CUC $18 million for nearly four years and allowing CUC to pay Mobil the $8.5 million for the fuel purchased for the power generators.
Sen. Joaquin G. Adriano recently told the media that placing the budget at $206 million instead of $215 million would result in severe budget cuts and layoffs of personnel across the board. Similarly, Adriano is placing the onus on the House to approve spending that is more than what is being collected.
Babauta’s administration certified that only $206 million would be collected in FY 2006. Notwithstanding this, the governor is still adamant about having a budget of $226 million that exceeds revenues by $20 million. Likewise, Sen. Adriano recently advocated that the House pass a $215 million budget, which is $9 million over the collections. Budget levels advocated by Adriano and Babauta will add to the government deficit, which is in the vicinity of $115 million.
The formula for a balanced budget is relatively simple: You spend only as much as you collect. This is the philosophy of the House for the FY 2006 budget. To justify spending more than what you collect in revenues will increase the deficit beyond the current staggering level and keep the CNMI government in a cash-strapped mode.
Babauta and the senators who have supported budgets over the amount of revenues collected since he became governor in January 2002 are responsible for the current fiscal dilemma in the CNMI. Since the electorate placed them in office to offer solutions and not problems, then it is time they be replaced with public servants who think more rationally along fiscal lines.
Dr. Jesus D. Camacho
Delano, California
