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Atalig: CUC infusions won’t become deficit
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Posted on Sep 01 2005
Finance Secretary Fermin Atalig said yesterday that the current financial crisis in the Commonwealth would drive up government expenses beyond the projected revenues, but he believes that such spending would not convert into a deficit.
He said that since the administration’s financial assistance to CUC is considered “emergency,” it does not qualify as part of the annual budget authority.
“If the use of local funds is emergency, that’s not considered as deficit because that’s not in the budget. Yes, I agree that if we exceed the authority for non-emergency purposes, then that’s a deficit. In this case, if we overspent because of the emergency [at] CUC, it should be taken out and not considered deficit because the [expenditure] not part of the budget authority,” said Atalig.
The government is currently on a $213-million continuing resolution.
When asked on the possibility of being accused of using the emergency to justify “authorized” overspending, Atalig said, “That’s implausible.”
“We’d rather have a normal government operations than to have a headache like the power situation,” he said.
Earlier, critics laughed off at the administration’s claim that it would not incur a budget deficit by the end of this fiscal year.
They cited the current CUC crisis, which has cost the government at least $9 million in reprogrammed funds; the garment industry downsizing, which would negatively impact the projected revenues; as well as the pullout of Japan Airlines after October this year.
Atalig agreed all these would result in major economic losses, but said most of these would be felt in the next fiscal year.
In the meantime, he said the garment revenue decline has been manageable this fiscal year.
The government is collecting an average of about $2 million a month in garment user fee following the worldwide lifting of trade quotas this year. It used to collect an average of $2.5 million a month in previous years.
The department also said that some $13 million “overspending” as of June 30 would be “covered” or balanced by Sept. 30 through certain funds such as the Compact impact funds of $5.1 million, as well as reprogrammed funds for CUC.
