‘Govt shortfall may exceed $51M’

The CNMI government is facing a budget shortfall that could soar to more than $51 million this fiscal year and only five agencies will be spared from funding cuts.

Gov. Benigno R. Fitial announced in a press conference Friday that the budget for departments and agencies is currently short by about $51 million. He added, however, that the actual shortfall may be bigger, since the estimated figure was based on the $213-million budget authorized by Public Law 13-24, the last enacted budget law.

Quoting acting Finance Secretary Eloy S. Inos, the governor reported that the government is expecting to collect only $190 million to $200 million in revenues in fiscal year 2006.

The difference this amount and the approved budget comes on top of the potential $51 million shortfall, Fitial said.

According to Fitial, the government will fully fund essential services such as the Public School System, Commonwealth Health Center, Commonwealth Utilities Corporation, Department of Public Safety, and the Department of Corrections.

The five agencies have a combined budget of $107 million based on P.L. 13-24. This leaves only about $48 million for the remaining agencies, excluding the Legislature, the Judiciary, Washington Representative’s Office, and municipal governments.

In view of this, Fitial listed government austerity measures now in effect: hiring freeze, strict enforcement of laws on the use of public vehicles, restricted use of government-issued mobile phones, and prohibition of over-the-cap salaries.

He has also asked the Department of Finance to review the government’s books for any items that could be “de-obligated”—for instance, purchases that did not go through or non-critical services not yet rendered.

On Friday, Fitial signed the first law enacted under this administration. House Bill 15-33, which became Public Law 15-1, gave the governor unrestricted reprogramming authority until a budget law has been enacted for FY2006.

The current fiscal year began on Oct. 1, 2005.

The new law, passed by the House of Representatives and the Senate over the two days following a joint meeting with Fitial, gives the governor reprogramming authority over appropriations not only to the central government, but also to all public corporations, autonomous agencies, and other entities of the CNMI government.

However, the governor’s reprogramming authority excludes funds restricted from reprogramming by federal law, federal grant conditions, CNMI constitutional prohibitions, and deposit and other security restrictions related to bond covenants and the financing of public projects.

The governor also cannot touch trust funds invested by the Marianas Public Land Trust and the NMI Retirement Fund, and all funds appropriated under all local laws.

Furthermore, the governor would not be allowed to reprogram funds of the legislative branch, judicial branch, Washington Representative’s Office, mayors, or municipal councils.